Stock indexes went for a ride this morning when news leaked that President Donald Trump had asked Republican lawmakers on Tuesday about whether he should fire Fed Chair Jerome Powell, and then Trump denied he was going to make a move. That kind of volatility benefits someone, writes Sonali Basak, global finance correspondent for Bloomberg Television, and you can see who in today’s bank earnings reports.

Plus: Starbucks’ CEO is pushing a revival based on cold foams and warm vibes, and here who’s benefiting from Trump’s NATO bashing. If this email was forwarded to you, click here to sign up.

It’s a windfall for the traders. At Goldman Sachs Group Inc., the unit that houses equities trading took in the largest haul of any bank in Wall Street history. Goldman’s $4.3 billion in revenue in the second quarter was over $1 billion more than the same business at JPMorgan Chase & Co.

What’s driving these gains? An extremely volatile first half of the year means that, yes, an incredible number of stocks were changing hands, and the banks that stood between those trades would therefore make a lot of money. Morgan Stanley and JPMorgan both also beat Wall Street analyst estimates for those businesses.

But there’s more to it than that. Goldman was also lending buckets of money to hedge funds and other buy-side clients. It’s a business that’s generally tied to prime brokerage, which is the heartbeat of any aggressive trading desk and has the closest ties to the most lucrative clients.

Equities financing revenue jumped 23% in the second quarter of 2025, while equities intermediation (the fees from standing between the trades) rose 45%. Financing in the fixed income, commodities and currencies unit rose by 23% too.

Goldman Sachs headquarters in New York. Photographer: Bing Guan/Bloomberg

JPMorgan said it’s leaning on its balance sheet to support its business. “We are deploying quite a bit of capital and other resources” to generate that revenue, Jeremy Barnum, the chief financial officer of JPMorgan, told analysts this week. “It’s obviously extremely client-centric. There’s a lot of financing of various types that’s being supplied.”

But he hinted at uncertainty around the ability to bring in more business if markets go haywire: “It seems to, if anything, more often than not be counter-cyclical rather than pro-cyclical. But it’s still markets, right? Things can happen. It’s volatile. There’s risk-taking involved.”

Clearly the banks have a close eye on the uncertainties tied to President Donald Trump’s trade war and are guarding against the potential for losing money. At JPMorgan, a line item called “VaR,” or value at risk, has declined from a year ago and from the prior quarter. This is how much money is being put at risk on any given day, which tends to be in the tens of millions. Goldman’s VaR rose slightly from the prior quarter, mostly in interest rates and equities.

Goldman CEO David Solomon pointed to some parts of the trading business doing better if some parts start to lag.

“There was strength in a bunch of areas, but there was weakness, for example, in commodities and mortgages,” he told analysts on Wednesday. “Next quarter, there could be strength in commodities. It's a very diverse business, and I really think what drives the size of the overall wallet is growth in activity in the world.”

Overall, JPMorgan took in more than $45 billion in second-quarter net revenue and Goldman nearly $15 billion—giving them ample room to take on the trading risks, which are nowhere near where they were pre-2008 financial crisis. And regulatory changes for banks in the coming months under the Trump administration could mean that the banks can put even more money to work.

This key Wall Street business has drawn a lot of competition from nonbanks like Citadel Securities, the market maker founded by billionaire Ken Griffin, and Jane Street, which surpassed Bank of America and Citigroup in trading revenue last year. They’re hiring aggressively from the top banks.

At the same time, the largest hedge fund clients have kept up decently this year and have dry powder to trade through the second half of the year. But given the Trump-fueled market volatility in the first half of 2025, there are big doubts on whether the Wall Street banks will make quite as much money from this business in the second half of the year.

Instead, they’ll have to perhaps rely even more on investment banking, taking fees from mergers and acquisitions. Those are just starting to bounce back from the pandemic lull.

WATCH: Bullish, an original series hosted by Sonali Basak, that goes on an immersive journey through the high-stakes world of finance as seen by its titans and rising stars. Find episodes here.

In Brief

• US wholesale inflation moderated in June as a sharp decline in the costs of travel-related services blunted a pickup in goods prices.
• The ChatGPT smartphone app has been downloaded 900 million times, significantly lapping Microsoft’s Copilot app, which has had 79 million downloads.
• New York City mayoral candidate Zohran Mamdani met with business leaders on Tuesday and said he would discourage anti-Israel language such as “globalize the intifada” going forward.
• On a new episode of Elon, Inc., host Max Chafkin and Bloomberg News reporters Dana Hull and Kurt Wagner chat about Elon Musk’s artificial intelligence company, xAI, its new Grok 4 model and where investment is coming from. Listen and subscribe to the podcast on Apple, Spotify, iHeart and the Bloomberg Terminal.
• ICYMI: In Tuesday’s Businessweek Daily, Joshua Green wrote about why Trump loyalists’ campaign against Powell has ramped up, as candidates jockey for the job of Fed chair.

Starbucks Wants You to Stay Awhile

Starbucks CEO Brian Niccol with the kind of mug offered to for-here customers. Photographer: Grant Hindsley for Bloomberg Businessweek

Brian Niccol is standing in the corner of a newly renovated Starbucks in Seattle on an afternoon in mid-April. Baristas are making iced cherry chai lattes and mocha Frappuccinos with whipped cream, and warming egg bites and croissants. Customers sit in plush mustard-colored chairs and on cushioned benches in an olive tone, surrounded by wood-paneled walls. “I like it,” says Niccol, who took over as chief executive officer in September. “I like the furniture. I like the lighting. I like the music.” Mostly he likes the vibe. People camping out, doing homework, chatting with friends. There’s a guy preparing a tax return.

“Every seat is full,” Niccol says. “That’s what we want. What we should be able to do is have spaces for people that, if you want to socialize, you can socialize. If you want a moment for yourself, you have a moment for yourself.” He asks me what I think is the best seat in the house, and I tell him I’d tried a few as I alternated between grabbing a bite and working on my laptop. “I want a great seat for whatever occasion you’re having. If you want to eat, that’s probably the best seat,” he says, pointing to the cushioned bench.

Niccol has been sipping a cold brew with chocolate cream cold foam (milk, cream, syrup and chocolate malt powder, blended until frothy). While he was waiting for his drink, he chatted with baristas, asking them how the store was running: Were there any issues? When one said no, he high-fived her.

Since the 1980s, Starbucks has sought to be a welcoming “third place.” Its efforts faltered during the pandemic as more coffee was taken to go and customers created such complicated orders on the Starbucks app that baristas struggled to keep up. Daniela Sirtori writes about the progress of Niccol’s turnaround strategy, complete with cold and protein-infused foams: How Starbucks’ CEO Plans to Tame the Rush-Hour Free-for-All

A Lift for Europe’s Weapons Industry

Photographer: Bre Furlong for Bloomberg Businessweek; prop stylist: Emma Ringness

Early this year, when Donald Trump was threatening to turn his back on NATO unless its members dramatically increased their annual contributions to the military alliance (“If they don’t pay, I’m not going to defend them”), his lieutenants traveled to Europe with an additional message from the president: Not only did Trump want each of the 32 NATO countries to bulk up their arsenals—he also expected them to buy American.

It might have been one demand too many. Although member nations ultimately appeased Trump in June by agreeing to boost their annual military spending to 3.5% of gross domestic product by 2035—and tossed in an additional 1.5% a year for defense-adjacent projects such as cybersecurity and infrastructure—their confidence in America’s commitment to the 76-year-old defense pact has been shaken. Rather than spend the money Trump squeezed out of them on a shopping spree for American guns and ammo, some European leaders instead see a chance to invest in weapons designed and manufactured at home, in hopes of one day luring customers from the US defense industry. Much like Airbus SE chipped away at Boeing Co.’s dominance in passenger jets and, improbable as it once seemed, eventually surpassed its larger US rival.

“The deal in previous times had been that European countries accepted buying significant high-tech weapons from the US, and in return there was an implicit contract that the US would be present on the continent and defend NATO territory,” says Guntram Wolff, a senior fellow at Bruegel, an economic research group in Brussels.

That arrangement seems to be changing, writes Wes Kosova in his new World Stage column: Europe’s Arms Makers Get a Boost From Trump’s NATO Demands

No. 2 on the Rich List

Riding the Ups and Downs

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