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By Niket Nishant and Nupur Anand

(Reuters) -JPMorgan Chase ( JPM ) topped first-quarter profit estimates on Friday, driven by record equities trading and higher fees from debt underwriting and merger advisory.

CEO Jamie Dimon, however, remained circumspect on the economy as corporate America navigated the fallout of President Donald Trump's tariffs, which have raised inflationary risks and fears of recession.

"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 economic 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. Since the tariffs were first announced, JPMorgan's ( JPM ) shares have dropped around 8% and hit a seven month-low earlier this week.

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

Earnings were $14.6 billion, or $5.07 a share, for the three months ended March 31, JPMorgan ( JPM ) said. 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-digits percentage gain. Equities trading surged 48% to a record $3.8 billion.

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

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

Analysts have also warned that escalating tensions between the U.S. and China, which was not offered a reprieve when Trump paused most of his reciprocal tariffs, 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.

Still, net interest income (NII) - the difference between what the bank earns on loans and pays out on deposits - rose 1% to $23.4 billion.

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

(Reporting by Niket Nishant in Bengaluru and Nupur Anand in New York, editing by Lananh Nguyen and Sriraj Kalluvila)