NEW YORK, July 7 (Reuters) - Driven in part by the blockbuster SpaceX mega IPO, a surge in sales and trading will power U.S. Wall Street bank earnings in the second quarter, supported by solid fee growth from advising on M&A deals, according to analysts and LSEG data.
Five of the six largest U.S. lenders, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs, will report results on July 14. Morgan Stanley will unveil second-quarter results on July 15.
Trading continues to be a source of strength in 2026 as volatility has remained higher than usual due to persistent geopolitical tensions and uncertainty surrounding disruption from artificial intelligence.
Market revenue is expected to be up at least 15% year-on-year for the largest global banks, said Angad Chhatwal, head of fixed income, currencies, and commodities (FICC) at Coalition Greenwich, a global analytics and data provider for the financial services industry.
"Equities is set to be the primary engine of growth across global markets. The SpaceX IPO will have generated significant revenues in banking but also for certain cash-equities desks during the quarter," said Jamie Vickers, head of equities at Coalition Greenwich.
Wall Street giants, including Goldman Sachs and Morgan Stanley, which had big roles in the nearly $86 billion SpaceX IPO, will likely outperform in equities, Morningstar analyst Sean Dunlop said. Banks on the SpaceX IPO raked in around $500 million in fees, Reuters and others reported.
But Dunlop cautioned that trading revenue for the second quarter, while still strong, may slow compared to the first quarter when unusually high levels of volatility from the initial Iran war shock and related inflation and interest rate repricing drove high levels of activity.
Investment banking has also been a strong area of revenue growth for banks, with mega equity offerings and multibillion-dollar transactions signalling the most bullish deal-making environment in years.
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 M&A advisory.
Chip designer Cerebras' $6.4 billion IPO and Google-parent Alphabet's $85 billion share sale were also among the top deals in the second quarter.
STRONG LOAN GROWTH
Banks will also benefit from loan growth and expansion in net interest margin, a measure of how much a bank earns from interest and pays out on deposits.
U.S. Federal Reserve data suggests loan growth accelerated in the second quarter, underpinned by robust momentum in commercial and industrial loans, analysts said.
"While some uncertainty persists from geopolitical factors and market volatility, many banks are reporting that clients are increasingly viewing the current environment as the 'new normal' and continuing to move forward with investment plans," Jefferies analyst David Chiaverini said.
Investors will focus on the outlook for loan growth in the second half of 2026 and executives' commentary on the U.S. economy as concerns remain around inflation hurting consumers' pocketbooks.
Investors should also keep a keen eye on credit metrics and broader loan demand as key pillars to support a continued rally across bank stocks into the second half of 2026, Morningstar analyst Austin Taggart said.
Here is what bank executives have said about upcoming earnings and what analysts expect from the six biggest U.S. lenders:
JPMORGAN CHASE
JPMorgan Chase's investment banking fees could rise 10% or more in the second quarter, CEO Jamie Dimon told an investor conference in May.
BANK OF AMERICA
Bank of America may exceed the initial forecast of 15% growth in second-quarter markets revenue, fueled by the equities business, Co-President Jim DeMare said in June.
CITIGROUP
Citigroup expects trading revenue to rise between high-single and low-double digits in the second quarter, Chief Financial Officer Gonzalo Luchetti said at an investor conference in June.
Investment banking revenue is expected to rise by a mid-teen percentage in the second quarter, he added at the time.
WELLS FARGO
Wells Fargo's net interest income is expected to "step up" in the second quarter, Chief Financial Officer Mike Santomassimo said at an investor conference in June.
GOLDMAN SACHS
Goldman Sachs has managed to advise on more than $1 trillion worth of announced mergers and acquisitions so far in 2026, marking a record pace for any investment bank within a half-year period, the Wall Street giant said in a LinkedIn post, citing Dealogic data on June 16.
MORGAN STANLEY
Morgan Stanley CEO Ted Pick said last month it was a pretty good time to be in the capital markets business. There is a lot of core investment banking activity, he said at the time.
|
Bank |
Q2 2026 EPS estimate |
Q2 2025 EPS |
|
JPMorgan |
$5.70 |
$5.24 |
|
Bank of America |
$1.11 |
$0.89 |
|
Citigroup |
$2.68 |
$1.96 |
|
Wells Fargo |
$1.71 |
$1.60 |
|
Goldman Sachs |
$13.91 |
$10.91 |
|
Morgan Stanley |
$2.84 |
$2.13 |
Source: LSEG estimates on June 30
Reporting by Saeed Azhar and Arasu Kannagi Basil; editing by Michelle Price
Source: Reuters