Banks are getting even better at making money no matter what: Morning Brief

Yahoo

17-07-2025

Interest rates staying higher for longer, trade uncertainty lingering for months, and market volatility blasting through portfolios haven't stopped the nation's biggest banks from raking it in.
What might be exasperating for many investors — whether it's people who need to convert their equities into cash or those relying on short-term gains — isn't all that bad for the financial services sector. This week, the five big Wall Street banks reported collective second quarter trading and investment banking revenues that rose 17% and 7%, respectively, compared to the same period last year.
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For equities desks, the volatility isn't antithetical to prosperity; it's a source of it. Buying and selling stocks and other products for their clients is what matters, rather than the price direction. That's how the market gyrations of the past quarter, which inspired among retail investors an emotional roller coaster of fear, anxiety, relief, and excitement, also greatly profited the major banks. Whether the ticker charts went up or down mattered less than all that money shuffling around.
And there was plenty of that. As my colleague Jake Conley reports, the S&P 500 (^GSPC) recorded some of its biggest one- and two-day swings during the past quarter. The flurry of events from the "Liberation Day" tariffs, the rollbacks and threats, and the Israel-Iran conflict rattled trading sessions. And while investors who had the stomach to peek at their 401(k) might have been sickened or reassured, depending on the day, banks were dutifully collecting fees in either direction.
That's a testament to the adaptability and diversification of financial services — a theme we hit last quarter as well. In the same way that banks can thrive amid trading volatility, they can also prosper in different interest rate environments, even when the economic outlook worsens.
Banks are even looking past — or through — the tariff uncertainty that economists have warned about. Bank executives made it clear this week that their corporate clients are moving forward with strategic plans despite shifting trade policy, giving the green light to mergers, raising debt, and going public. Whether the market is disregarding looming tariff deadlines or has embraced the White House vision of rebalancing trade is its own interesting story.
Is some sort of Wall Street reckoning on the way? As JPMorgan Chase CEO Jamie Dimon recently said, the markets could be underplaying the threats on the horizon as complacency and desensitization set in.
Ultimately, it might not matter — for the banks, that is.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
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