July 23 (Reuters) - Northern Trust ( NTRS ) beat Wall

Street estimates for second-quarter profit on Wednesday as a

rally in the equity market and higher fees boosted the asset and

wealth manager's results.

Major U.S. indexes received a boost from a late-quarter

rebound, fueled by optimism around potential interest-rate cuts

and progress on trade negotiations.

Markets had been rattled earlier in the quarter by changing

U.S. tariff strategies and rising geopolitical strain.

Assets under custody and administration climbed 9% to $18.1

trillion in the quarter ended June 30. Assets under management

rose 11% during the same period.

Net interest income - the spread between earnings from

assets and costs from liabilities - rose 16% in the reported

quarter. Trust, investment and other servicing fees increased

6%.

"Northern Trust ( NTRS ) reported another quarter of strengthening

results, featuring mid-single digit trust fee growth, record net

interest income, and meaningful expansion in our pretax margin,"

CEO Mike O'Grady said.

Earnings across the custody and asset management sector are

getting a lift from recovering markets, resilient client flows

and favorable currency movements.

Northern Trust ( NTRS ) reported profit of $2.13 in the second

quarter. Analysts on average had expected $2.05 per share,

according to estimates compiled by LSEG.

Earlier this month, BNY also beat Wall Street's

profit estimates as the world's largest custodian bank benefited

from higher interest income and fee revenue.

The Wall Street Journal reported last month that BNY had

approached smaller peer Northern Trust ( NTRS ) about a potential merger.

Northern Trust ( NTRS ), which is based in Chicago, later said it was

fully committed to remaining independent.

Deal activity in the sector is expected to accelerate in the

second half of the year.

Still, analysts view a merger between BNY and Northern Trust ( NTRS )

as unlikely, pointing to regulatory challenges and skepticism

about Northern Trust's ( NTRS ) willingness to sell. They also said BNY

may turn its attention to other potential targets.