Wall Street executives continued to sound the warning bell that a slump in client activity has crimped trading and investment-banking revenue after a tough start to June.

“I’d be very surprised if we beat the first quarter,” Morgan Stanley Chief Executive Officer James Gorman said Tuesday at an industry conference in New York. “The last two weeks have been quite hard. Up until then, it was solid. We’re not going to have a bad quarter in the securities business, but you’ve got to be realistic with the environment.”

Gorman said that macro trading was especially “challenged,” while merger activity has been “lumpy.” At Citigroup Inc., second-quarter fixed-income and equities trading revenue will likely fall by a percentage in the “mid-single-digit range” from a year ago, while investment-banking fees are expected to drop by a percentage in the “mid-teens,” Chief Financial Officer Mark Mason said separately at the conference.

Markets have swung this quarter on the latest developments in President Donald Trump’s multiple trade skirmishes and the outlook for potential moves by the Federal Reserve. Goldman Sachs Group Inc. CEO David Solomon said in a CNBC interview Tuesday that the quarter has been “up and down,” declining to give a forecast for the firm’s trading revenue.

Morgan Stanley’s institutional business generated $5.2 billion in revenue in the first quarter. While Gorman expects a decline, the business is likely to easily exceed $4 billion in revenue this quarter as its stability has increased in recent years, he said.

Gorman and Mason join JPMorgan Chase & Co. CEO Jamie Dimon in warning that trading revenue has declined. Citigroup CEO Michael Corbat said last month that market uncertainties have led clients to stay away from trading. But Ted Pick, who leads Morgan Stanley’s institutional-securities business, said last month that prime-brokerage balances have been accelerating during the year and that there’s still confidence in markets.

“We certainly saw a slowdown in the first quarter coming out of December where there was low volatility and heightened uncertainty,” Mason said Tuesday. “Frankly, that slowdown has persisted.”

Other highlights from the conference:

• Gorman said he’s “highly confident” Morgan Stanley will reach or surpass $4 billion to $5 billion in fixed-income trading revenue this year.
• He’s troubled by the tone taken by the U.S. and China in their trade dispute. A full-on trade war could push the U.S. into a recession, Gorman said.
• Gorman wants Morgan Stanley’s bank subsidiary to be “much bigger” and a profit center on its own.
• Citigroup’s Mason said more corporate clients in the firm’s treasury and trade solutions unit have asked the bank to help them receive direct payments from consumers -- a business usually operated by Visa Inc. and Mastercard Inc.