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Morgan Stanley’s Wealth Clients Buy the Dip Amid Trump Tariff Volatility
Morgan Stanley reported a 15% increase in second-quarter net income to $3.5 billion, driven by higher revenues in its wealth management division and trading business. The bank’s finance chief, Sharon Yeshaya, attributed this success to the “buy-the-dip” mentality of retail investors following President Donald Trump’s tariff announcements in April.
Trump’s tariff announcement on April 2 caused significant market volatility, but individual investors quickly responded by buying the dip, providing stability to the markets. This surge in retail engagement boosted Morgan Stanley’s wealth management business, which includes the online trading platform ETrade, leading to a 14% increase in revenues to $7.8 billion compared to the same period last year.
During the quarter, Morgan Stanley’s wealth management business saw net new assets of $59.2 billion, surpassing analyst expectations and indicating strong growth momentum. Additionally, the bank’s equities trading business experienced a 23% increase in revenues, while fixed income trading climbed 9% year-over-year.
Despite a 5% decline in revenues in the investment banking division, Morgan Stanley’s overall performance was in line with its Wall Street rivals, who also benefited from the market turbulence caused by Trump’s tariff announcements. CEO Ted Pick noted an uptick in investment banking activity in June, indicating a potential rebound in the division.
In pre-market trading, Morgan Stanley’s stock was down by 1.8%, reflecting the overall market sentiment. Overall, the bank’s strong performance in wealth management and trading businesses offset challenges in investment banking, highlighting the resilience of its diversified business model.
This article is based on the original content published on the Financial Times website and showcases the key points and insights from Morgan Stanley’s second-quarter earnings report. Stay informed by unlocking the Editor’s Digest for free and access curated stories selected by the Editor of the FT.
