Analysts and investors said they were surprised by the strength of the earnings.
"I'm a little bit surprised by the magnitude of the beats," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, who manages portfolios that hold shares of Bank of America and JPMorgan.
Goldman Sachs GS.N exceeded second-quarter profit expectations, Wells Fargo WFC.N beat Wall Street estimates for second-quarter profit, and Citigroup C.N reported a 45% jump in second-quarter profit and its highest quarterly revenue in a decade. Morgan Stanley MS.N will report second-quarter results on Wednesday.
"The biggest beats were coming from investment banking, capital markets, and trading," said Neville Javeri, portfolio manager at Allspring Global Investments, pointing to Goldman and JPMorgan as particular beneficiaries. Javeri, who manages funds that are overweight bank stocks, including holdings in JPMorgan, Citi added that "capital markets and investment banking have sort of been the drivers for all the banks."
Global investment banking revenue hit $61.4 billion in the first half of 2026, a 24% jump from a year earlier, according to Dealogic data. JPMorgan remained the global leader in investment banking revenue, while Goldman Sachs was the global leader in advising on M&A.
Chip designer Cerebras' CBRS.O $6.4 billion IPO and Google-parent Alphabet's GOOGL.O $85 billion share sale were also among the top deals in the second quarter.
"We thought the (second quarter) earnings were going to be very good, but they turned out to be extraordinary," said Macrae Sykes, portfolio manager at GABF ETF, Gabelli Funds. "We continue to believe the environment for the major banks is very constructive due to business activity, market engagement and demand for capital with average loans up around 10%."
Bank shares were mixed. JPMorgan rose 1.7%, BofA gained 1.8% and Goldman jumped 7.3%, however Citi lost 4.3% and Wells Fargo dropped 2.6%. Citi's shares were hurt by investors worries about potentially worse results in the second half due to a rise in expenses.
"It's the best bank set up in years," said Lauren Cassidy, Chief Investment Officer for the Founders 100 ETF. "And this is an unusual quarter. Everything's working."
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