The trade war due to tariffs has caused market-wide pain, and there has been no shortage of escalation. The White House now says that China faces up to 245% tariffs, and that’s definitely going to invite even more escalation in the coming weeks. However, not all companies are losers. A handful of companies could still deliver some gains.

Bank of America (NYSE:BAC) should be near the top of your list for trade war insulation as it has been thriving with an 11% surge in profits due to the recent trade war.

Why Banks are Thriving
Market volatility caused by the tariff announcements is leading to increasing trading activity. Bank of America’s trading desks are capitalizing on this, and equities trading revenue has jumped 17%. The surge in trading offset declines in other areas and even boosted growth.

Moreover, Bank of America’s net interest income rose 3% due to higher loan balances and reaffirmed its forecast for further NII growth of 6–7% for the full year. It also added 250,000 net new checking accounts and saw a 4% increase in combined and debit card spending. Consumer banking revenue grew 3% because of this.

Is BAC Stock a Good Hedge vs. the Trade War?
According to BAC’s own Global Fund Manager Survey, most investors now cite Trump’s tariffs as the top market risk, the highest consensus in 15 years. This uncertainty has led to a 117% decline in BAC’s share price since the start of the year, even as the bank posted stellar results recently.

Plus, M&A and IPO activity dropped 13% in the first quarter. Investment banking fees are down 3% year-over-year. BAC set aside $1.5 billion for potential credit losses, up from $1.3 billion in 2024 due to slowdown risks.

Regardless, it has now seen increased trading offset those, and the Federal Reserve’s Collins also assured to step in if things do go wrong, I think BAC is much more insulated from the trade war’s volatility. The market sentiment has also changed due to the significant earnings beat, so I’d buy the dip.

— Omor Ibne Ehsan

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Source: Money Morning