U.S. investment banks' business income rebounded strongly in the second quarter, as huge issuances, mergers and acquisitions and restructuring boosted Wall Street's performance
Thanks to SpaceX's historic initial public offering (IPO) and a strong recovery in very large corporate mergers and acquisitions, major U.S. Wall Street investment banks are expected to announce this week their most impressive investment banking revenue performance in four and a half years. Forecast data compiled by the media show that (JPMorgan Chase), (Goldman Sachs), (Morgan Stanley), The total investment banking fee and commission income of the five largest U.S. investment banks (Bank of America) and Citigroup is expected to surge 27% year-on-year in the second quarter of this year to US$11.1 billion. This is the highest quarterly revenue since the industry's all-time highs in 2021. Analysts pointed out that despite the geopolitical fluctuations caused by the conflict between the United States and Iran, the U.S. stock market achieved its best performance in the past six years in the last quarter, supported by the investment boom in artificial intelligence, the phased decline in oil prices, and the resilience of the consumer market, laying the foundation for the explosion of the core business of investment banks. The recovery of equity financing business has become the core engine of this round of growth. Data show that the equity capital markets business revenue of the above-mentioned five major investment banks in the second quarter is expected to reach US$2.7 billion. Among them, the US$500 million in underwriting fees paid for SpaceX's initial public offering set a record high in global public offering history, directly boosting the performance of the 23 investment banks participating in the underwriting. As the lead underwriters, Goldman Sachs and Morgan Stanley each reaped substantial profits of approximately US$100 million. Industry analysts point out that the listing process of a new generation of very large technology companies such as SpaceX, OpenAI and Anthropic is having a profound and specific structural impact on the capital market. In the field of mergers and acquisitions (M&A), the merger advisory revenue of the five major investment banks is expected to increase by nearly 30% year-on-year to more than US$4 billion. This is the third consecutive quarter since 2021 that this revenue has remained at a high of US$4 billion. Morgan Stanley pointed out in its latest report that thanks to the concentrated emergence of very large mergers and acquisitions of more than US$10 billion, the scale of global announced mergers and acquisitions in 2026 is heading towards a record high. In addition to investment banking and advisory services, as geopolitical conflicts and changes in macroeconomic policies have intensified financial market volatility, the stock and bond trading departments of various banks have also achieved high profits by providing transaction convenience and financing support to customers. Including JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and The six major U.S. banks including Wells Fargo are expected to achieve net profits of approximately US$44 billion in the second quarter, a year-on-year increase of 18%. Saul Martinez, head of U.S. financial stocks research at HSBC, said that despite the early performance of bank stock prices and rising market expectations, the strong performance of the three major U.S. stock indexes and financial sectors still reflects the capital market's estimate of the resilience of the U.S. real economy. However, Martinez also warned that if geopolitical conflicts further escalate and international oil prices surge again, the risk of imported inflation and slowing economic growth will once again pose a severe test to the balance sheets of financial institutions.