Trump buoys and buffets Wall Street's biggest banks
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Illustration: Aïda Amer/Axios
Bank stocks slid Wednesday as investors fixated on President Trump's proposed cap on credit card rates rather than on earnings. Yet the banks' results also showed that their trading revenue has surged, thanks in part to Trump's policies.
Why it matters: For the financial sector, Washington is both friend and foe.
Zoom out: Bank stocks outpaced the S&P 500 in 2025, and their most recent earnings this week have been strong.
- Bank of America's results beat forecasts.
- Both Bank of America and Wells Fargo reported their highest full-year net income in four years.
Yes, but: The proposed 10% cap on credit-card interest rates left a cloud over the earnings results.
- The first few questions on the Bank of America media call were about politics, not company fundamentals, with CEO Brian Moynihan saying a cap could have "unintended consequences."
- Citigroup's chief financial officer said the change could hurt the economy, and JPMorgan Chase's CFO said it was a "weakly supported" directive.
What they're saying: "There is little that any bank can do to alleviate investor concerns," Bank of America analysts wrote in a note on JPMorgan (yes, the banks have analysts that analyze other banks), pointing to investors' focus on the credit-card cap.
- Clarity will have to come from Washington, not from the banks on earnings calls.
Flashback: Unpredictable policy was a benefit for banks not so long ago, driving market volatility and opportunities for trading last year.
- When Trump proposed global sweeping tariffs back in April, investors rushed to reposition their investments.
- The major banks profit from this kind of surge in client activity.
- BofA's trading revenue rose 23% in the final quarter of the year, a 10% increase from a year ago, and their best quarter ever.
A looser regulatory approach from the Trump administration was also a boon for dealmaking.
- M&A advisory business surged at Citigroup and rose at BofA.
- Still, investment banking looked light at JPMorgan Chase, though the executive team blamed that on deal timing that will come in the first quarter of this year.
The bottom line: As Trump pivots from pro-business to pro-affordability, who wins and loses on Wall Street under his leadership keeps changing.
