JPMorgan Expects Dealmaking Fees to Drop as Tariff and Geopolitical Tensions Mount

May 19, 2025 | New York – At its annual investor presentation in New York today, JPMorgan Chase & Co. (NYSE: JPM) warned shareholders that its second-quarter investment banking fees are projected to decline by a mid-teens percentage year-on-year, as escalating U.S. tariffs and ongoing geopolitical uncertainty weigh on global dealmaking Reuters. The bank’s leadership also reaffirmed its CEO succession timeline and highlighted potential AI-driven efficiency measures that could impact future headcount.

Tariffs Cloud Dealmaking Outlook

Chief Financial Officer Jeremy Barnum told investors, “The evolving tariff environment, combined with the preexisting geopolitical tensions, adds significant uncertainty into the economic outlook.” He noted that while trading revenue is likely to grow by a mid-to-high single-digit percentage, deal activity has stalled as corporate clients adopt a “wait-and-see” stance amid shifting trade policies Reuters.

Barnum further cautioned that “the combination of inflation and large fiscal deficits may constrain the available policy responses in ways that further increase the risk,” framing the fee slowdown as part of a broader macroeconomic puzzle Reuters.

Succession and Strategic Priorities

In addition to the fee guidance, JPMorgan’s management reiterated that CEO Jamie Dimon’s succession plans remain unchanged, despite market chatter about potential candidates. Dimon, who has led the bank for more than 19 years, “remains deeply committed,” according to co-CEO Troy Rohrbaugh, who also oversees the commercial and investment bank division.

Investors pressed the bank on how it plans to balance near-term revenue headwinds with long-term growth initiatives, including:

• AI-Driven Efficiency: The bank is exploring AI tools to automate select back-office tasks and credit monitoring processes, potentially reducing support-staff headcount over time.
• Selective Acquisitions: While open to strategic bolt-ons, JPMorgan will remain disciplined, focusing on assets that complement its core banking, asset management, or payments businesses.
• Capital Deployment: Barnum confirmed the bank will maintain its $110 billion share-buyback target for 2025 but may adjust the pace depending on market conditions and regulatory capital requirements.

Market Reaction

Shares of JPMorgan fell 0.8 percent on the announcement, underperforming the broader S&P 500’s 0.2 percent slide. Analysts at UBS and Morgan Stanley downgraded their fee-revenue estimates for Q2, projecting industry-wide declines of 10–15 percent in advisory and underwriting fees.

“JPMorgan’s cautious tone reflects a broader retrenchment across Wall Street,” said Lauren Murante, head of banking research at Credit Suisse. “Other major banks have already signaled similar fee pressures, so this warning is consistent with a tempered M&A pipeline as companies prioritize operating cash flow over transformational deals.”

Broader Implications

The slowdown in deal fees follows months of tariff escalations between the U.S. and key trading partners, including the EU and China. Since early April, the U.S. has imposed additional 10 percent duties on a range of industrial and consumer products, prompting retaliatory tariffs and supply‐chain adjustments.

A Morgan Stanley survey of corporate treasurers showed that 62 percent have delayed planned M&A or capital-raising transactions due to tariff-related cost uncertainties. “When companies face an unpredictable duty regime, they often pivot to internal investments or operational efficiency projects instead of pursuing external growth through deals,” noted Michael Ptasznik, head of M&A advisory at Barclays Financial News London.

Looking Ahead

With headline risk rising, JPMorgan’s outlook underscores the challenge facing U.S. financial services firms: maintaining robust fee pools in an environment of strained cross-border trade and geopolitical friction. While trading desks may benefit from volatility, and net interest income remains a key buffer, the industry’s reliance on M&A and underwriting fees means a sustained period of uncertainty could weigh on profitability.

JPMorgan will host follow-up analyst calls next week to provide more granular breakdowns of fee drivers by region and sector. Investors will be watching closely for any signs of tariff relief or renewed deal momentum as the summer deal season unfolds.