Wall Street’s biggest banks are facing weaker investment banking momentum after a strong first half of 2026, as rising Treasury yields, geopolitical tensions and uncertainty surrounding artificial intelligence investments delay a recovery in mergers, acquisitions and initial public offerings (IPOs).
Third-quarter results from six major US lenders showed uneven performance, with JPMorgan Chase recording its first profit miss since the fourth quarter of 2023, while Bank of America also fell short of market expectations. Goldman Sachs, Wells Fargo, Citigroup and Morgan Stanley beat earnings forecasts, but their shares traded lower or showed little reaction as investors questioned the strength of the results.
The slowdown in dealmaking has reduced the momentum investment bankers expected to carry through the year. Higher borrowing costs and market volatility have made companies more cautious about major transactions, while delays to several high-profile IPOs have weakened sentiment. Executives, however, indicated that the delayed listings had not been cancelled.
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Trading performance also diverged. Equities desks benefited from increased market activity as clients adjusted portfolios and hedged against risks, while fixed-income trading underperformed.
Consumer banking remained a source of support. Net interest income, which measures the difference between interest earned on loans and interest paid on deposits, increased. Executives also reported resilient consumer spending, continued borrowing and steady loan demand despite persistent inflation and elevated interest rates.
The results highlight the uneven outlook for US banks as they balance weaker capital-market activity against continued lending demand and trading opportunities.
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