NEW YORK, July 14 (Reuters) - Wall Street bank earnings powered ahead in the second quarter with a strong lift from fees for advising on mergers and acquisitions and surging trading revenue, but the lenders warned about risks to the economy and markets.
The SpaceX initial public offering has helped. Wall Street banks, including Goldman Sachs and Morgan Stanley, played big roles in the nearly $86 billion SpaceX IPO. Banks on the SpaceX IPO raked in around $500 million in fees.
Investment banking has been a strong area of revenue growth for banks, with mega equity offerings and multibillion-dollar transactions signaling the most bullish dealmaking environment in years. Trading continues to be strong with higher-than-usual volatility due to geopolitical conflict and uncertainty surrounding AI disruption.
"We've had really terrific global markets performance and investment banking performances," said Bank of America Chief Financial Officer Alastair Borthwick on the bank's media call. "Business continues to feel good."
Bank of America BAC.N beat estimates for second-quarter profit, benefiting from record trading activity and a surge in dealmaking, one of five banks reporting on Tuesday.
JPMorgan Chase JPM.N reported a similar theme. Big-ticket IPOs and dealmaking helped drive investment banking fees to their highest levels since 2021, while stock traders capitalized on volatile markets.
"Concerns around affordability and inflation exist, but the labor market and wage growth remain strong. Markets and U.S. economy have absorbed macroeconomic and geopolitical uncertainty," Wells Fargo CEO Charlie Scharf said.
"Strong environments like this don't last forever, and we see large amounts of capital being deployed by both banks and non-banks across a broad range of risk assets."
Industry revenue momentum
"What’s going on in equities is a booming environment with a ton of activity, big IPOs, the AI theme, a very active environment," said JPMorgan CFO Jeremy Barnum on the bank's media call.
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.
XLF•
