Trump's presidency leads to Wall Street's huge profits

Expectations of Trump's policies have sparked "animal spirits" on Wall Street, leading to significant growth in bank stock performance.

On Thursday, large U.S. banks reported a substantial increase in profits for the fourth quarter of 2024, revitalizing Wall Street. JPMorgan Chase achieved a record high in annual net profit, while Goldman Sachs saw its profits more than double. Citigroup turned a profit from a loss in the same period last year, and Wells Fargo's profits grew by 47%. Bank stock prices surged in response, driving the overall market higher.

The growth in Wall Street's banking sector is primarily attributed to corporate clients' optimistic outlook on the economic prospects and the incoming Trump administration, which has stimulated a rebound in mergers, financing, and trading activities. JPMorgan Chase's Chief Financial Officer Jeremy Barnum stated:

There is no doubt that optimism has significantly increased in the overall environment.

Investment banking performance was strong, with JPMorgan's investment banking fees rising by 49% year-on-year and Goldman Sachs' investment banking revenue increasing by 24%. Revenues from bond underwriting and equity underwriting saw substantial growth. Trading revenues also generally rose, with Goldman Sachs' trading revenue increasing by 33% and trading volume growing by 36%.

Several bank executives expressed optimism about business prospects for 2025, particularly in investment banking. Goldman Sachs CEO David Solomon remarked:

There has been a noticeable shift in CEO confidence, especially after the results of the U.S. elections were announced.

Despite the optimistic outlook, bankers remain vigilant about potential risks. JPMorgan Chase CEO Jamie Dimon warned:

Geopolitical conditions are the most dangerous and complex since World War II. Factors such as inflationary pressures, policy uncertainty, and global turmoil could impact market performance