Wall Street converges on higher risks and rewards

Five of the six largest U.S. banks reported results for the second quarter on July 14.

Earnings at Goldman Sachs rose 78% from a year ago to $6.6 billion in three months to June 30. Citigroup, JPMorgan, Bank of America, and Wells Fargo reported increases of 45%, 40%, 26% and 17%, respectively.

JPMorgan boss Jamie Dimon has now allocated $175 billion of capital to investment banking and markets, up from $80 billion at the end of 2019. Assets in the firm’s trading operations surpassed $1 trillion for the first time this year. Bank of America BAC.N has increased the capital dedicated to its trading unit to nearly $54 billion from $38 billion five years ago.

For now, the strategy is paying off. SpaceX’s public debut could for more big deals. Geopolitical uncertainty and the rise of artificial intelligence are keeping markets active, whether through jolts of volatility or efforts to raise mind-bogglingly huge sums to plow into data centers and the like. JPMorgan’s investment banking fees rose 45% in the quarter, while equity trading revenue jumped 86%.