Major banks known for investment and trading activity reported mixed third-quarter results, with both stock and bond markets under pressure from the continuing conflict involving Iran, an uptick in inflation, and questions surrounding the scale of spending tied to artificial intelligence infrastructure.

Quarterly disclosures from JPMorgan, Citigroup, Goldman Sachs, and Wells Fargo pointed to a deceleration in the dealmaking and trading activity that had driven record first-half profits, with bank executives noting that turbulence in bond markets and fluctuating equity prices — particularly toward the end of September — had weighed on business volumes.

Dealmaking held up across the third quarter with a healthy pipeline in place, and company executives told analysts that consumers, commercial borrowers, and the broader economy were all holding steady. Goldman Sachs chief David Solomon described the economy as notably resilient in the face of headwinds and pointed to what he called an ongoing technology supercycle.

The prevailing conditions for regulation, one executive suggested, appear to be drawing out deal-making and consolidation across the sector.

Prolonged pressure in bond markets — with yields climbing to multi-decade highs across numerous countries — has pulled dealmaking activity lower by squeezing the price levels at which stocks can realistically be valued. Activity in the IPO space has pulled back over the past several weeks, putting a dent in what had shaped up to be a strong year for new listings.

JPMorgan's chief financial officer, Jeremy Barnum, told reporters that while choppy market conditions and an uncertain economic backdrop had weighed on deal activity and bond-market volumes in recent months, the pipeline of prospective transactions remained in strong shape — with most deals put on hold rather than abandoned outright, as the gap between buyers and sellers tends to widen during periods of market instability.

Those who track IPO activity have noted that the market remains open to deals on a selective basis, with postponed listings still viable if broader conditions find firmer footing before the year closes. Solomon aligned with that view when he noted that timing a delay is a choice, not a necessity, given that the market itself remains in reasonably healthy territory.

Executives at both Citigroup and Wells Fargo pointed to a pullback in investment banking activity during the third quarter, with the Wells Fargo finance chief noting on a reporter call that the climb in the benchmark 10-year yield had left a mark on deal flow. Separately, Brian Mulberry, chief market strategist at Zacks Investment Management, offered the view that elevated interest rates and the prospect of further Federal Reserve rate increases were placing measurable downward pressure on trading and investment banking activity.

Executives at JPMorgan and Wells Fargo told analysts that household and corporate borrowers had held up through elevated prices and tighter lending conditions, with credit quality showing little sign of deterioration — Santomassimo noting that nothing in the data pointed to financial strain.

Equity desks at banks posted healthy volumes as investors reshuffled holdings in response to shifting interest-rate expectations and climbing energy costs. Trading activity within JPMorgan's markets division generated a 15% year-on-year lift in third-quarter revenue, driven in large part by a 49% jump on the equity markets side.

Third-quarter earnings at Goldman cleared analyst forecasts, with heightened activity in equity markets — linked to tensions in the Middle East — pushing trading revenue higher, while the fixed income, currency and commodities division posted a 1% decline against the same period a year ago.

Bank shares moved in different directions following the earnings releases, with Wells Fargo and Citigroup posting declines while JPMorgan and Goldman Sachs advanced. Chris Kotowski, an analyst at Oppenheimer & Co, noted in a written commentary that a key question hanging over those institutions and their large-bank peers is how far the earnings outperformance has been driven by equities trading activity, and whether that revenue stream can hold up over time.