Wall Street Banks Post Strong Profits, But Quietly Brace for Turbulence Ahead

As trade tensions rise and economic signals grow harder to read, America’s largest banks are posting quarterly results that reflect both resilience and caution.

Behind the strong headline numbers lies a deeper story about shifting sentiment, mounting uncertainty, and quiet preparation for what could be a turbulent year ahead.

Amid a backdrop of market jitters sparked by President Trump’s tariff push, top financial institutions—JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley, and Citigroup—reported solid first-quarter profits. Volatile markets, driven by the initial rollout of tariffs in February and March, delivered an unexpected windfall in trading revenues, which surged 17% to surpass $36 billion. Collectively, the group pulled in $35 billion in profit, marking a notable 13% year-over-year increase.

Consumers, for now, continue to spend, and businesses appear stable, offering some reassurance that the economy hasn’t buckled under early trade pressures. Still, none of the major Wall Street players provided updated earnings forecasts, reflecting a shared unease about what lies ahead—particularly following Trump’s early April tariff escalation, which triggered a steep sell-off in both stocks and bonds after the quarter had closed.

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While some analysts expressed surprise at the strength of the results, they cautioned that much of the financial sector’s performance hinges on future policy clarity. Wells Fargo’s Mike Mayo observed that the current economic headwinds could still be weathered—provided the administration moves swiftly to deliver promised regulatory relief for banks.

Yet optimism wasn’t universal. Goldman Sachs chief David Solomon warned that recession risk is growing, while JPMorgan’s Jamie Dimon said he expects significant turbulence, with a downturn looking increasingly likely. In such a scenario, both earnings and share prices could take a hit.

At the same time, voices like Citigroup’s Jane Fraser and Bank of America’s Brian Moynihan struck a more confident tone. Fraser pointed to the enduring strength of the U.S. economy, even in the face of structural shifts. Moynihan, too, highlighted ongoing consumer momentum and corporate profitability, though he admitted the outlook is murky. “Nobody has perfect visibility,” he noted.

The investment banking divisions, surprisingly, didn’t falter. Despite expectations of a slowdown, several firms posted higher revenues in the segment. While some deals have been delayed, Morgan Stanley’s Ted Pick insisted the mood is one of temporary caution rather than long-term retrenchment. “This is a pause—not a collapse,” he said.

Still, actions speak louder than earnings calls. In preparation for potential economic stress, JPMorgan, BofA, Citi, and Wells Fargo set aside $8.4 billion in provisions for possible loan losses—up nearly a third from a year earlier. The message: things are steady now, but no one’s betting on calm waters ahead.

As Ken Leon of CFRA Research put it, “We’re not out of the woods. Things will stay bumpy—and that wears on everyone.”

Alexander Stefanov