Robust trading activity amid high market volatility boosts banks’ earnings.

Driven by strong trading revenue that benefited from market volatility, the big Wall Street banks posted strong second quarter results, Moody’s Ratings reports.

The large U.S.-based global investment banks — Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo — reported stronger earnings in the quarter, underpinned by “very strong” trading revenue and relative stability in the other major aspects of their businesses.

“Trading revenue rose 17% in aggregate from a year ago and accounted for one-quarter of the group’s net revenue, buoyed by high market volatility in the first part of the second quarter and good client flows as the quarter progressed,” Moody’s reported.

Apart from Wells Fargo, the firms all generated a double-digit increase in trading revenues, “with some firms pointing to strong performance in macro products such as currencies and rates,” the rating agency noted.

At Citi, Goldman Sachs and Morgan Stanley, equities trading revenue was also “particularly robust,” Moody’s said, with each of these firms posting year-over-year growth of at least 20%.

At the same time, the results from their investment banking businesses were mixed, as the rise in uncertainty amid erratic U.S. trade policy subdued activity. Nevertheless, aggregate investment banking revenue rose by 6% in the quarter, despite declines at Bank of America and Morgan Stanley, the rating agency noted.

“Debt underwriting results were soft in Q2, with heightened volatility hindering some activity and all except JP Morgan reporting lower year-over-year revenue,” it said. “Equity underwriting was mixed, with year-over-year revenue growth at Citi and Morgan Stanley but declines at Bank of America and JP Morgan.”

There were also wide disparities in advisory revenue, the report noted, with Citi and Goldman Sachs “substantially outperforming” the rest of the big banks.

“Wealth and investment management earnings were steady to improving, aided by good client inflows and rising market values,” Moody’s also noted.

Additionally, net interest income improved at several of the Wall Street giants, driven by “continued loan and deposit growth.” And, the banks’ loan loss reserves were little changed for most of the group, “as economic uncertainty abated somewhat and consumer credit metrics remained favourable.”