BofA, Goldman Sachs and Morgan Stanley benefited from a surge in trade due to US duties

The profit of Bank of America, Morgan Stanley and Goldman Sachs in the second quarter exceeded analysts' expectations. The banks were able to capitalize on market volatility caused by President Trump's April announcement of duties against key partners and the ensuing trade war. This led to a surge in trade, higher corporate borrowing and increased foreign exchange transactions, points out WSJ, which helped banks offset the impact of economic uncertainty and geopolitical risks.

Revenue at the second coolest U.S. bank in the U.S. sales and trading segment jumped 15% to $5.4 billion, setting a record for the second quarter. Equities revenue rose 10% due to "stronger client activity" and was also the highest for BofA, reports Reuters, while fixed income, currencies and commodities revenue soared 19%. 

Total revenue rose 4% to $26.5 billion, falling short of analysts' expectations of $26.72 billion.

One of the key metrics for banks - net interest income, which reflects the difference between a bank's interest income (e.g., from loans) and the interest it pays - also fared slightly worse than Wall Street estimates. BofA said it was up 7% from a year ago - to $14.7 billion, while analysts had expected $14.71 billion, stated Investopedia. The bank maintained its forecast for net interest income growth in the second half of 2025. 

BofA's second-quarter net income rose 3 percent year on year to $7.1 billion, with earnings per share of 89 cents versus forecasts of 86 cents, which accounts forReuters. 

The bank is benefiting "from the revaluation [in the market] - against a backdrop of significant geopolitical uncertainty, changes in interest rates, policy changes as a result of last year's election and modifications in supply chains," BofA chief financial officer Alastair Borthwick told reporters.

"Consumer demand remained solid, spending and asset quality were strong, and commercial borrowers' loan utilization rates increased. In addition, we saw good momentum in our market operations," said Bank Governor Brian Moynihan.

The most significant positive surprise in the second quarter came from  BofA's debt capital business, KBW analyst Chris McGraty estimated. The momentum was influenced by robust trade in April, following the U.S. president's announcement of trade duties, explained he. 

Profit at the sixth-largest U.S. bank rose 22% in the second quarter to $3.72 billion, the report said. This was also helped by a rise in deals and trading volume amid market turmoil caused by Trump's duties, the WSJ wrote. Earnings per share came in at $10.9, beating Wall Street's forecasts -the consensus was $9.69. translates Barron's. 

Goldman Sachs' revenue increased 15% year-on-year to $14.58 billion. In comparison, analysts expected the figure to not exceed $13.5 billion. 

The trading division's revenue rose to $4.3 billion, helping the bank set a new Wall Street record for equity trading revenue in a single quarter - a result that was 36% higher than the same period last year and better than analysts' expectations by about $600 million.

The bank's net interest income jumped 56% to $3.1 billion, also well above the Wall Street consensus forecast, by more than $300 million, according to data Investopedia.

Morgan Stanley, which ranks 14th in terms of assets in the U.S., reported a 15% rise in quarterly net income to $3.39 billion, or $2.13 per share. Wall Street, for its part, forecast earnings per share in the range of $1.96 to $1.99, according to Barron's and CNBC.   

The bank's revenue added nearly 12% to $16.8 billion, which also beat analysts' estimates who expected $16.1 billion. 

Revenue from operations with institutional clients increased from $7 billion to $7.6 billion due to increased activity in the markets. Equity trading showed particularly strong growth, bringing in $3.7 billion, up 23% from a year earlier, counted Bloomberg. Morgan Stanley's equity traders had the best second quarter in the bank's history, the agency said.

Net interest income in the second quarter of 2025 was $1.9 billion, unchanged from the previous quarter.

Morgan Stanley CEO Ted Pick warned that the investment banking sector's recovery from the market collapse and economic uncertainty over the trade escalation is still in the "early stages," writes Barron's. He pointed to increased client activity and interest in June, saying, "If we can continue in the fall what we saw last month, the second half of the year could be very successful."

Shares of BofA, a number of whose results fell slightly short of analysts' estimates,  fell 1.1% following the release of the statements. ;

Quotes Goldman Sachs almost unchanged - by 0.1%. Profit better than expected was not enough to push the bank's shares up, investors saw no reason for further growth, comments MarketWatch. "While results in the Global Banking & Markets division were strong, we believe the market expected this, so the stock reaction will be subdued," said Citi analyst Keith Horowitz, who reiterated a neutral rating for Goldman Sachs.

Shares of Morgan Stanley fell - by 2.5%, despite strong reporting. The reason was a sag in revenue in the investment banking division, which fell from $1.62 billion to $1.54 billion, MarketWatch points out.

Amid sharp market volatility in the second quarter due to the duties, the trading divisions of all five "big league" banks - JPMorgan, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America - showed double-digit growth. Together, they generated nearly $34 billion in revenue from financial market transactions - 17% more than a year earlier, WSJ. 

After the turbulence of the second quarter, things stabilized in the third quarter, MarketWatch writes. "For now, the economy and markets are generally responding positively to policy changes. But because events rarely unfold in a straight line, we remain focused on risk management," Goldman Sachs CEO David Solomon said after the report was published.

So far, the banks' results paint a cautiously optimistic picture of the U.S. economy, noted Barron's the day before - when three of the five major players submitted their reports. Despite ongoing uncertainties - from trade risks to potential fiscal policy changes - banks are showing resilience in key business areas, from trading and asset management to consumer lending.

Credit losses remain within forecasts, the growth of delinquencies is moderate and, according to the banks themselves, is not systemic. Demand for loans from business and households has started to recover, which can be seen as a signal of confidence in the future of both consumers and the corporate sector, Barron's explains;

Nevertheless, due to uncertainty in trade policy and changes at the federal level, tensions remain, which investors are factoring into their valuations, the publication points out. 

This article was AI-translated and verified by a human editor