(Reuters) -BlackRock ( BLK ) posted a drop in first-quarter profit on Friday as the world's largest asset manager took a hit from higher expenses.

Stock markets also faltered in the first quarter of 2025 after a strong run last year as the Trump administration's erratic approach to trade policy kept investors on the back foot.

"Uncertainty and anxiety about the future of markets and the economy are dominating client conversations. We've seen periods like this before when there were large, structural shifts in policy and markets - like the financial crisis, COVID, and surging inflation in 2022," CEO Larry Fink said in a statement.

The benchmark S&P 500 index fell 4.6% in the first quarter of 2025, its worst start to a year since 2022.

Total expenses in the quarter rose to $3.58 billion from $3.04 billion last year.

However, assets under management at the New York firm rose to $11.58 trillion from $10.47 trillion last year, as investors poured into exchange traded funds and other low-risk products.

Adjusted profit in the quarter rose to $11.30 per share in the first three months of 2025, compared with $9.81 per share a year ago.

Fink said earlier this week that the U.S. economy might already be contracting, days after President Donald Trump's announcement of steep new tariffs unleashed a punishing market rout. Trump later temporarily lowered levies on certain countries in a surprise reversal that offered some relief to bruised markets worldwide.

The stock has lost nearly 11% since Trump's "Liberation Day" announcements last week.

However, Fink has said that the market weakness was "more of a buying opportunity than a selling opportunity" in the long run and did not pose systemic risks.

The company's net income came in at $1.51 billion, or $9.64 per share, for the three months to March 31, down from $1.57 billion, or $10.48 per share, a year earlier.

(Reporting by Pritam Biswas in Bengaluru; Editing by Devika Syamnath)