Rising volatility tied to AI-related stocks, geopolitical tensions and Federal Reserve uncertainty fueled a sharp increase in US equities trading activity in FY2025, helping drive a double-digit jump in investment banking revenues, according to the Crisil Coalition Greenwich report Volatility and geopolitical uncertainty drove FY25 global markets revenues.
The Americas generated $34.9 billion in investment banking equities trading revenue in FY2025, up 23.8% year over year, making it the strongest-performing equities region globally, according to the report.
The report said higher trading volumes, increased client activity and growth in electronic execution helped fuel the expansion across cash equities, equity derivatives and prime services businesses.
According to Aamir Hazaria, Director of Competitor Analytics at Crisil Coalition Greenwich, volatility linked to tariffs and geopolitical developments played a major role in accelerating trading activity across US equity markets.
“In FY2025, increased market volatility driven largely by tariff-induced uncertainty and geopolitical tensions, led to record-breaking trading volumes in US equities and FICC markets,” Hazaria said.
Global cash equities revenues rose 17.4% year over year to $12.2 billion, driven by higher trading volumes and a 12% increase in client spend, the report said. The Americas were among the regions leading the acceleration in electronic trading volumes, according to the findings.
Nitin Agicha, Vice President in Market Structure & Technology at Crisil Coalition Greenwich, said the continued shift toward automated execution reshaped trading dynamics across US markets.
“Shifting execution from high-touch, human-intermediated models to automated i.e., low-touch has increased market liquidity, tightened bid-ask spreads, and compressed commission rates, while enabling brokers to handle higher volumes efficiently, thereby boosting overall trading activity and revenue,” Agicha said.
He added that advances in algorithmic trading systems also created opportunities for firms to deploy lower-risk trading strategies, further increasing volumes.
The report showed algorithmic and smart-order-router trading accounted for 43% of buy-side trading activity in FY2025, while portfolio trading rose to 39%.
US equity derivatives markets also saw strong growth as investors sought to hedge against volatility tied to macroeconomic events, Fed policy and geopolitical uncertainty.
Global equity derivatives revenues climbed 21.4% year over year to $24.7 billion. Single-stock options emerged as one of the strongest-performing segments, driven by volatility and dispersion among AI-related stocks, according to the report.
Agicha said the structure of US markets gave them an advantage over other regions in attracting derivatives activity.
“The US market’s superior liquidity and tighter bid-ask spreads, driven by advanced electronic trading platforms and a high concentration of popular tech stocks attracts both retail and institutional investors compared to other regions,” Agicha said.
He noted that retail participation had a particularly large impact over the past year, while AI-related themes, tariff uncertainty and geopolitical developments increased volatility in individual US stocks and created additional trading opportunities.
The report also pointed to rising activity in exotics derivatives in the US, including more complex positioning tied to tariff announcements and volatility-driven strategies.
Prime services and futures revenues rose 21.5% year over year to $34.5 billion, supported by elevated US equity valuations and continued strength in technology stocks, according to the report. Delta One trading revenues increased as volatility and short-selling activity created additional trading opportunities.
The report said futures activity was also boosted by client hedging demand and cross-asset repositioning tied to geopolitical uncertainty and AI-led sector rotation.
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