Global Banks Seen Reaping Trading Windfall Amid U.S. Tariff Turbulence

A moderate but noteworthy uptick in markets revenue has been forecasted for global banks, including the largest U.S. financial institutions, as the effects of shifting U.S. trade policies have been absorbed and monetized by trading desks. Analysts at Crisil Coalition Greenwich, a financial market intelligence firm, have estimated a 10% increase in second-quarter markets revenue across twelve of the world’s top banking institutions. This rise follows a robust 15% year-on-year surge in trading income during the first quarter, a gain that had already surpassed many initial expectations.

The anticipated growth has been largely attributed to the volatility triggered by U.S. President Donald Trump’s tariff pronouncements in April, which created abrupt movements across asset classes, from equities to bonds and currencies. These fluctuations have been seen as opportunities by trading professionals, especially those involved in market-making functions. According to comments from banking insiders, market participants had responded to the turbulent conditions with large-scale portfolio adjustments, which in turn generated substantial trading volumes and increased demand for liquidity provision.

Bank of America and Citigroup, two of the major U.S. players covered in the analysis, had previously communicated expectations of mid-to-high single-digit percentage growth in markets revenue for the second quarter. However, based on more recent insights shared by executives and analysts, it has been suggested that actual earnings figures could potentially surpass these estimates when banks begin releasing their quarterly financial results next week.

Volatility, it was pointed out by industry sources, remains one of the primary drivers of increased trading activity. With unpredictable tariff measures being imposed or threatened across various sectors and trade partners, the resulting market reactions have been described as an ideal environment for revenue generation by trading desks. A senior Wall Street executive, speaking anonymously, noted that the synchronized decline in stocks, bonds, and the U.S. dollar had contributed to an elevated risk perception, prompting investors to rebalance or “derisk” their portfolios—thereby further fueling trading volumes.

The Crisil Coalition Greenwich projections have been derived from performance data and internal estimates involving a group of 12 globally significant banks. These include U.S. giants such as JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, and Wells Fargo, in addition to their major European counterparts. Market analysts emphasized that the trading benefits derived from this volatility were broad-based but appeared to have favored equities more significantly than other asset classes.

Mollie Devine, who leads markets competitor analytics at Coalition, indicated that equities revenue was expected to rise by approximately 18% in the second quarter on a year-on-year basis. This growth, she noted, had outpaced that of fixed income and currencies, even though those markets are typically larger in scale. Bonds were projected to see a more modest gain of around 5%, still considered notable given their generally stable performance characteristics.

The phenomenon has not gone unnoticed by equity research analysts, who have observed that the trading landscape for banks appears to be undergoing a normalization process following a few years of subdued activity. According to Wells Fargo’s Mike Mayo, there has been evidence that banks are now operating under conditions of sustained, elevated trading activity, driven not just by tariff news, but also by continuing shifts in interest rate expectations and geopolitical developments.

The recent surge in U.S. Treasury trading volumes, as reported by electronic trading platform Tradeweb Markets, was linked directly to the announcement of Trump’s new tariff plans. These announcements triggered immediate reactions across global capital markets, leading to a ripple effect that benefited liquidity providers and market intermediaries.

While these revenue boosts have added temporary strength to the earnings outlook for major banks, industry experts have cautioned that such tailwinds may not be permanent. The sustainability of this momentum will likely depend on the persistence of uncertainty in trade and economic policy, which—while beneficial for short-term trading—can also create structural risks for the broader financial system if left unresolved.

As the financial results for the second quarter are awaited, market observers will be monitoring closely to determine whether this earnings season confirms the optimistic projections and whether trading revenues continue to serve as a bright spot in the banks’ overall performance amid a mixed macroeconomic backdrop. What remains clear, however, is that in an era of policy unpredictability and tariff-driven tensions, global banks have shown a remarkable ability to adapt—and profit—through the volatility.