Bank of America and Morgan Stanley Lead Profit Surge as Volatile Markets Boost Trading Revenues

Recent market volatility over the past three months—driven in part by escalating tensions surrounding the war in Iran—has unexpectedly delivered strong gains for Wall Street’s biggest banks. As global markets swung sharply, trading desks capitalized on the turbulence, while companies accelerated deal-making amid a still-resilient economic backdrop.

Bank of America reported that its first-quarter stock trading revenue reached $2.8 billion, marking a 30% increase compared to the same period last year. Meanwhile, Morgan Stanley posted even larger gains, with equity trading revenue climbing 25% to $5.15 billion. Its bond-trading division also delivered standout performance, rising 29% to $3.36 billion.

Morgan Stanley’s results reflected strength across its entire business. The bank recorded net income of $5.6 billion and earnings per share of $3.43—both up 30% year over year—marking a record quarter.

These results align with strong performances reported by other major institutions this week, including Goldman Sachs and JPMorgan Chase. While volatile markets often create uncertainty for everyday investors, they tend to fuel trading activity on Wall Street, where rapid price movements translate into higher volumes, commissions, and fee-based income.

Despite the strong quarter, Bank of America CEO Brian Moynihan emphasized a cautious outlook, pointing to ongoing geopolitical risks in the Middle East, Ukraine, and other regions, as well as the recent surge in energy prices. Even so, executives noted that the bank’s trading operations remained exceptionally steady, reporting no single day of losses during the volatile period—while also achieving its highest-ever quarter in equity sales and trading.

Beyond trading, both Bank of America and Morgan Stanley saw significant momentum in investment banking. Advisory revenues at Morgan Stanley nearly doubled, rising from $563 million to $978 million year over year. The banks are currently advising several major companies preparing to go public, including ventures linked to Elon Musk’s SpaceX.

On the consumer side, Bank of America continued to demonstrate stability. Its consumer banking division generated $3.1 billion in profit, supported by growth in deposits and loans. Customer spending also increased, with credit and debit card usage rising 7% compared to last year. Notably, the bank observed double-digit growth in spending on gasoline and energy, reflecting broader trends tied to rising fuel costs.

Despite these pressures, executives maintained that the U.S. consumer remains resilient. According to CFO Alastair Borthwick, employment levels continue to provide a strong foundation.

“The key indicator we watch is unemployment,” he noted. “At 4.3%, it continues to support consumer strength.”