Second quarter earnings at JPMorgan Chase (JPM) were better than expected Tuesday, as a boost in dealmaking demonstrated how Wall Street recovered from the spring freeze that accompanied President Trump’s “Liberation Day” tariffs.
Investment banking revenue at JPMorgan rose 8% from last year’s second quarter to $2.5 billion due largely to advising on mergers and equity underwriting. Bond underwriting fell 2% but still exceeded analyst expectations.
JPMorgan CEO Jamie Dimon said investment banking activity “started slow but gained momentum as market sentiment improved” and “the U.S. economy remained resilient in the quarter.”
He also offered some notes of caution, however.
“Significant risks persist,” he added, “including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.”
JPMorgan raked in a total of $15 billion of net income over the second quarter, a 17% drop compared to the same period last year. But that drop was largely due to the fact that the comparison was skewed by a one-time gain on its Visa shares recognized in the second quarter of last year.
Excluding that one-time gain in addition to a $774 million income tax benefit, JPMorgan’s profits rose 9% in the second quarter to $14.2 billion compared with $13.1 billion in the year-ago period.
Three months ago, a sense of gloom hovered over the first quarter earnings season as bankers grappled with a halt in dealmaking and the market chaos that followed Trump’s April 2 “Liberation Day” tariff announcement, with some warning of “considerable turbulence” and a possible recession.
Read more: What Trump’s tariffs mean for the economy and your wallet
That gloom has been replaced by measured optimism in the lead-up to the start of another earnings season this week.
“Essentially every part of the company is firing,” JPMorgan CFO Jeremy Barnum said. “We are firing on all cylinders.”
Some red-hot IPOs and sizable mergers have helped, as have several developments in Washington, D.C., while the Trump administration begins to loosen capital and supervisory rules for big banks.
JPMorgan wasn’t the only bank to see an investment banking boost. At Wells Fargo (WFC), fees from that work rose 10% from a year ago to $696 million. At Citigroup (C), investment banking fees also climbed 13% in the second quarter.
“It certainly seems like volumes are picking up,” Wells Fargo CFO Mike Santomassimo told reporters.
Citigroup CFO Mark Mason told reporters on a separate call that “we’re seeing really momentum across a multitude of sectors across the board, particularly in healthcare and tech.”
Even the volatility triggered by Trump’s tariffs turned out to be a boost for Wall Street trading desks as investors churned through their bets.
At JPMorgan, trading revenue rose by 8% to $8.9 billion, with both equities and fixed income markets businesses seeing jumps.
Revenue also rose across JPMorgan’s sprawling consumer bank as well as its asset and wealth management division. However, revenue fell in its corporate unit.
JPMorgan raised its guidance for a key revenue source — net interest income — by $1 billion for the full year, to $95.5 billion. Excluding interest income from its markets business, it now expects to earn $92 billion, or $2 billion more in net interest income than it previously expected.
Wells Fargo lowered its guidance for 2025 net interest income to the previous year’s $47.7 billion. Previously, management had guided for a 1% to 3% rise from last year’s level. That helped push its stock down.
JPMorgan’s stock was flat in Tuesday morning trading, while Wells Fargo fell more than 4%. Citigroup was up slightly.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. His email is david.hollerith@yahoofinance.com.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
