Wall Street’s Fee Machines Flex: Q2 Earnings Fire Up Financial-Services ETF Plays

A two-day earnings blitz on July 15–16 2025 showed that Wall Street’s biggest fee-collecting franchises are humming even as traditional spread banking cools. BlackRock (BLK) set fresh records for assets under management, Goldman Sachs (GS) and Morgan Stanley (MS) cashed in on surging trading activity, while universal banks JPMorgan Chase (JPM), Bank of America (BAC) and Citigroup (C) rode resilient consumer spending and a tentative revival in capital-markets fees. Together the six reported more than $42 billion in combined profit and flashed a consistent message: fee income and diversified platforms are cushioning any plateau in net-interest income.

Where Earnings Meet ETFs

1. Asset-Management Muscle (BLK) BlackRock’s AUM hit $12.53 trillion and adjusted EPS reached $12.05, powered by $152 billion of net inflows and a push into private credit. Investors who want that secular growth theme without single-stock risk can lean on the SPDR S&P Capital Markets ETF (KCE); its equal-weight approach mixes asset managers, custody banks and data vendors, diluting headline shock but amplifying the fee-income play.

2. Trading Titans (GS & MS) Goldman’s equities-trading revenue jumped 36 % to $4.3 billion, while Morgan Stanley beat estimates with $16.8 billion in revenue as both fixed-income desks and wealth management surged. Those dynamics map cleanly onto the iShares U.S. Broker-Dealers & Exchanges ETF (IAI), where GS and MS top the roster and rising volatility translates directly into fatter bid-ask spreads and financing fees.

3. Universal-Bank Engines (JPM, BAC & C) JPMorgan booked $14.2 billion in profit and raised its full-year net-interest-income target even as it warned on tariffs; Bank of America’s $0.89 EPS showed deposit growth still outpacing funding costs; Citigroup’s $1.96 EPS got a lift from booming debt-underwriting fees. For investors seeking diversified consumer-plus-services exposure, the iShares U.S. Financial Services ETF (IYG) bunches all three lenders with card networks and insurers—tempering rate-risk while keeping a front-row seat to credit-cycle trends.

Insight: Playing the Whole Q2 Tape

Fee Power vs. Rate Plateau – With JPM guiding higher on NII but Wells Fargo guiding flat, the safest macro-hedge is to overweight fee-centric ETFs (KCE, IAI) that don’t live or die by the Fed’s next move.

Volatility Is Fuel – Tariff headlines and a spike in equity swings juiced trading desks; if cross-asset turbulence persists, broker-dealer heavyweights inside IAI should keep printing wide spreads.

Private-Credit Boom – BlackRock’s HPS acquisition signals a land-grab in higher-margin private lending. KCE offers low-cost access to that secular trend, while fintech-leaning funds such as ARK Fintech Innovation ETF (ARKF) provide an ancillary bet on digital distribution.

Watch the Credit Creep – JPM’s non-performing assets ticked up despite blockbuster earnings. A sharper turn in credit quality would dent consumer-bank revenue streams and, by extension, the IYG basket faster than capital-markets funds.

Bottom Line:

Q2 proved that Wall Street’s fee factories—from BlackRock’s asset-management colossus to Goldman’s trading engine—are more than offsetting any drag from stabilizing loan spreads. Rather than cherry-picking individual winners, thematic financial-services ETFs such as KCE, IAI and IYG let investors ride the entire earnings wave while spreading single-name risk ahead of what could be another headline-heavy second half.

See which financial-services fund delivers the best exposure with our ETF Compare Tool