Jefferies' Profit Plunge Highlights Wall Street Challenges

Jefferies reported a 15% drop in first-quarter profit, impacted by weakened bond trading and stalled stock market deals amid U.S. trade policy shifts and geopolitical tensions. Despite the downturn, advisory revenues rose due to strong market share performance, showing a mixed picture for Wall Street's investment banking landscape.

Jefferies' first-quarter profit faced a significant decline of nearly 15%, the company announced Wednesday, citing challenges in bond trading and stalled stock market deals. The slowdown was attributed to ongoing uncertainty stemming from changes in U.S. trade policy and geopolitical tensions.

As the equity underwriting sector grapples with market volatility and uneven demand, Jefferies' executives remain optimistic about investment banking opportunities. The firm saw its revenue from equity underwriting plummet by 39% in the first quarter due to difficult market conditions under President Donald Trump's administration.

Despite the broader challenges, Jefferies experienced market share gains, with a 17% revenue increase from advisory services and a 54% surge in debt underwriting revenue. This partially offset the declines, leading to a 7% lift in overall investment banking performance. The bank's participation in significant deals like SailPoint's IPO underscored potential recovery signs.

(With inputs from agencies.)