(Reuters) -JPMorgan Chase topped first-quarter profit estimates on record equities trading and higher fees from debt underwriting and advising on mergers, but the bank remained wary about a possible global recession this year.

CEO Jamie Dimon, who warned this week of negative consequences from trade wars, maintained his cautious tone as corporate America navigates President Donald Trump's tariffs.

"Clients have become more cautious amid an increase in market volatility driven by geopolitical and trade-related tensions," Dimon said. "The economy is facing considerable turbulence, including geopolitics."

The results from the biggest U.S. bank offer a glimpse into the implications of Trump's trade agenda. While his return to the White House boosted business optimism in the first quarter, policy uncertainty has upended those hopes.

The administration last week unveiled steep reciprocal tariffs on dozens of countries, only to pause many of them on Wednesday.

JPMorgan's shares rose over 2.5% after hitting a seven-month low earlier this week.

Dimon said the bank's economists estimate a 50% chance of a U.S. and global recession this year, down from 60% earlier this month.

"People are being cautious and pulling back on deals. The middle-market companies are being very cautious on investments," Dimon added.

The bank increased its provisions for credit losses in the first quarter to $3.3 billion from $1.9 billion a year earlier. Consumers and businesses could struggle to repay their loans if the import levies reignite inflation and dampen economic growth.

The buildup of reserves shows JPMorgan is taking a cautious approach to the economic uncertainty, which is a good signal, said Chris Marinac, director of research at Janney Montgomery Scott.

Earnings were $14.6 billion, or $5.07 a share, for the three months ended March 31. That compares with $13.4 billion, or $4.44 a share, a year earlier.

Excluding one-time costs, the bank earned $4.91 per share, higher than estimates of $4.61, according to data compiled by LSEG.

Heightened volatility in the first quarter due to shifting expectations lifted the bank's trading business as investors quickly adjusted their portfolios.

Trading revenue climbed 21% to $9.7 billion, higher than the earlier expectations of a low double-digit percentage gain. Equities trading surged 48% to a record $3.8 billion.

Investment banking fees climbed 12% to $2.2 billion, helped by higher debt underwriting and advisory fees.

Chief Financial Officer Jeremy Barnum said the bank was taking a cautious stance on investment banking.

"Corporate clients have a bit of a wait and see attitude," said Barnum.

CREDIT RISK

U.S. consumer confidence plunged to the lowest level in more than four years in March amid worries of a recession and higher inflation because of tariffs.

Analysts have also warned that escalating trade tensions between the U.S. and China could upend supply chains and trigger price hikes.

On Monday, Dimon warned shareholders that trade wars could have lasting negative consequences, including persistent inflation and high fiscal deficits.

That could strain the financial health of consumers and increase risks of loan defaults.

However, the bank is so far not seeing distress signs among its clients, including low-income customers, Barnum said.

There has been no weakness in the credit-card business and consumers are front-loading some spending over concerns about price increases, Barnum added.

Net interest income - the difference between what the bank earns on loans and pays on deposits - rose 1% to $23.4 billion.

The bank expects NII to be $94.5 billion for the full year, higher than the $94 billion it forecast earlier. Guidance for NII excluding markets remained unchanged at $90 billion.

"JPMorgan continues to defy any and all odds from a performance perspective and it continues to outperform all its peers," said David Wagner, portfolio manager at Aptus Capital Advisors. "There is going to be increased uncertainty, but some of their guidance, including on net interest income, is better than what I would have had expected."

After the recent market upheaval, Dimon was asked if he would support adjustments to the supplementary leverage ratio, a rule that requires big U.S. banks to keep an extra layer of loss-absorbing capital.

"We'll let the government decide that. I think they should be making some of those changes. But very importantly, I don't want them making changes to benefit JPMorgan Chase. Those changes would help the functioning of the liquidity in the Treasury markets," he said.