Wall Street’s big firms saw their capital markets revenues decline in the second quarter, and results from this segment may continue to struggle in the short term, according to a new report from Fitch Ratings.

The rating agency says that the capital markets revenues of the five big U.S. global trading and universal banks were “negatively impacted by a generally lackluster trading environment, which resulted in subdued client activity.”

Specifically, lower quarterly revenues in trading of fixed income, currency and commodities (FICC) offset improvements in underwriting revenues, it notes. “FICC revenues for the five U.S. [banks] have been on a structural downward trend, primarily due to newly imposed regulations, such as the Volcker Rule,” Fitch says. And, it says, if the downward trend continues, earnings from capital markets will continue to be weak.

Despite this recent weakness, Fitch says that the FICC business continues to remain a significant earnings driver. However, it also says it believes that FICC revenues “will remain challenged” in the short term, due to the evolving regulatory landscape and economic conditions.

“New rules on capital will continue to impact FICC revenues,” it says. “However, equity market revenues should pick up with higher volatility and volumes. M&A revenues should be strong reflecting the completion of previously announced deals.”