Morgan Stanley (MS.N), opens new tab beat first-quarter profit estimates on Friday, helped by record equity trading and strong wealth management results, while its CEO expressed more optimism about dealmaking than his counterparts.

The investment bank reported record equity trading revenue, with a 45% jump from a year earlier, reflecting increases across businesses and regions, particularly in Asia, with its biggest gains in prime brokerage and derivatives.

As uncertainty over sweeping U.S. tariffs roiled markets, some transactions in Morgan Stanley's deal pipeline were paused, CEO Ted Pick told analysts. Still, companies have not given up on them, he said.

"We are still, I will call it 'cautiously optimistic' that we won’t go into recession," Pick said. CFO Sharon Yeshaya added that the bank's pipeline of potential transactions remains strong and has not been reduced.

Corporations may look at potential tax cuts and deregulation and decide to proceed with deals even as volatility rises, Pick said.

The bank earned $4.3 billion, or $2.60 per share, in the three months ended March 31. That compares with a profit of $3.4 billion, or $2.02 per share, a year ago. Analysts expected earnings per share of $2.20, according to estimates compiled by LSEG.

A rebound in Asia helped lift global M&A volumes in the first quarter, but U.S. activity — a key revenue driver for firms such as Morgan Stanley — slumped 13% amid growing uncertainty, according to Dealogic data.

Equity underwriting revenues fell as issuers and investors considered market uncertainty.

Bankers and analysts warn the prolonged trade war, disappointing IPO debuts and weak follow-through on major deals could dampen investor sentiment and advisory pipelines in the second quarter.

Stable markets support deal activity by giving buyers and sellers more confidence around valuations, reducing execution risk and encouraging companies to move ahead with transactions.