Wall St banks caught in capital markets lull after a strong first half of 2026
XLF•Third-quarter results showed a slowdown in dealmaking and investment banking fees at major U.S. banks, while equity trading benefited from increased market activity and fixed-income trading underperformed. JPMorgan Chase missed profit expectations, Bank of America fell short, and four other large banks beat estimates.
1. Mixed earnings results
Quarterly results from six of the largest U.S. banks showed uneven performance after a strong first half of 2026. JPMorgan Chase posted its first profit miss since the fourth quarter of 2023, while Bank of America also fell short of market expectations; the other four banks beat estimates, but their shares traded lower or showed little reaction.
2. Deal activity slows
Dealmaking slowed in the third quarter as market volatility, geopolitical concerns, rising Treasury yields and uncertainty about the AI trade kept companies on the sidelines. Investment banking fee growth slowed sharply from the prior quarter, with an interest-rate hike and delays to several high-profile IPOs weighing on sentiment; executives said the IPOs had not been canceled.
3. Trading and consumer banking
Equity desks benefited from increased market activity, while fixed-income trading underperformed. Net interest income rose, and executives pointed to resilient consumer spending and borrowing as well as continued loan demand.
