By David Hollerith

Big banks are offering the latest view of how their customers are faring amid President Trump's tariff turmoil, and it's not all bad — at least for now.

"The message has really been that the sky is not falling," Saul Martinez, a bank analyst for HSBC, told Yahoo Finance on Tuesday.

Five of the country's largest banks over the past week posted first quarter rises in profits and revenue, driven in part by trading operations that benefited from the market volatility triggered by the initial rollout of Trump's first tariffs in February and March.

Read more: The latest news and updates on Trump's tariffs

Collectively, net profits at JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Morgan Stanley (MS), and Goldman Sachs (GS) amounted to $35 billion, a 13% increase from the year-ago quarter. Revenue also rose at all of these banks. Trading revenue alone jumped 17% to more than $36 billion.

Many banks said their consumer customers were still spending, defaults were still manageable, and businesses were not experiencing distress despite the uncertainty about the months ahead. None of the institutions with big Wall Street footprints updated their earnings outlooks for the rest of the year, either.

What these results didn't include, however, was the volatile period that followed Trump's April 2 "Liberation Day" tariff announcement, which took place two days after the quarter ended. Stocks and bonds plunged and have yet to fully recover, ushering in new uncertainty about the economy and the safety of US assets.

"We're surprised about the degree of ongoing firmwide strength at all 5 big banks ... and the more than expected upbeat views," said Wells Fargo banking analyst Mike Mayo in a Tuesday note.

"To us, it all says that events since Apr 2 can still be little more than a speed bump, so long as policy moves faster to help ease most of the uncertainty," he added, in reference to promised deregulation of the banking industry expected from the Trump administration.

Not that banks and their top executives were entirely upbeat. Goldman Sachs CEO David Solomon said that the prospect of a recession "has increased." JPMorgan CEO Jamie Dimon said the economy faces "considerable turbulence," with a recession as a "likely outcome."

In such a scenario, he added, "earnings won't be great and the stocks will go down."

But many bankers were noticeably more optimistic. The word "recession" did not come up once on Citigroup's Tuesday earnings calls with analysts. Jane Fraser, CEO of Citigroup, also offered an optimistic vision of the current turmoil.

Citigroup CEO Jane Fraser. (Reuters/Elizabeth Frantz) · REUTERS / Reuters

"When all is said and done, and longstanding trade imbalances and other structural shifts are behind us, the U.S. will still be the world's leading economy," she said in a statement with the bank's Tuesday earnings release.

Brian Moynihan, CEO of Bank of America, went out of his way on Tuesday to note that his bank's research team doesn't see a recession happening in 2025.

Read more: What is a recession, and how does it impact you?

US consumers, he added, keep "pushing money into the economy," and the lender's business clients "remain profitable, liquid and have strong results."

But "nobody has a perfect crystal ball," Moynihan acknowledged, noting that "we potentially face a changing economy in the future."

Brian Moynihan, CEO of Bank of America. (Reuters/Yves Herman) · REUTERS / Reuters

Some banks even showed a rise in investment banking income during the first quarter, defying predictions of a slowdown. Executives acknowledged some deals were now on hold due to uncertainties, but many described the pullbacks as temporary rather than long-lasting.

"I'm saying pause versus delete," Morgan Stanley CEO Ted Pick told analysts of the current investment banking environment. "We don't know whether the economy is going to contract."

Even amid the optimism, there were signs that banks are preparing for harder times. JPMorgan, Bank of America, Citigroup, and Wells Fargo (WFC) added $8.4 billion in provisions to account for future loan losses.

The figure was 29% higher than the year-ago period and 9% higher than the previous quarter.

"We're still in a cloudy period. It's going to be choppy from here, and it's exhausting,” Ken Leon, an analyst for CFRA Research, told Yahoo Finance.

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.

Source: Yahoo finance