Third-quarter earnings among the largest names on Wall Street came in at varying levels, with some institutions outperforming expectations while others fell short. Those figures pointed to how swiftly trading conditions can shift in capital markets, even when the preceding six months had posted strong returns.
Quarterly earnings at JPMorgan Chase came in below analyst forecasts — a result the bank had not posted in close to three years — while Bank of America also recorded figures that trailed expectations. Pipeline order, deal activity, and overall tone remained composed among company leadership, with the order book described as robust and transaction flow characterised as sluggish rather than stalled.
A climb in Treasury yields weighed on investor confidence, while an armed conflict involving Iran introduced further strain into an already unsettled market environment. Questions about whether the AI sector's growth rate would hold left company boards hesitant as they considered their options. Across September, a number of anticipated public offerings were pushed back, while dealmaking conversations lost momentum.
Banking sources characterised the pause in deal activity as a postponement rather than a permanent withdrawal, with JPMorgan's chief financial officer, Jeremy Barnum, telling reporters that the pipeline of transactions awaiting completion remained intact and that many of those deals retained the momentum needed to eventually move forward.
Combined fee revenue from the quarter's investment banking activity across the six biggest U.S. banks reached a total of $12.4 billion. Compared with the previous year, the figure had climbed by 8.2 percent. Earnings release data showed that figure running roughly 9.5 percent below the output posted in the preceding quarter, which had stood as a period of notably strong results.
Among the firms tracked, Goldman Sachs posted results that drew particular attention. Advisory fees tied to mergers and acquisitions counselling hit an all-time high, pushing total dealmaking revenue to $3.2 billion — a 22 percent gain against the prior year's comparable figure. Revenue from investment banking at JPMorgan advanced 14 percent against the same period a year earlier, though the figure pulled back 8 percent from the preceding quarter.
Worldwide deal-making totalled $993 billion across the July-to-September period, a figure representing a 41 percent retreat from the preceding quarter's pace. LSEG data, as relayed through one broadcast outlet, placed the figure beneath the $1 trillion threshold for the first time since the second quarter of the previous year. Large deals became harder to come by as the spread between buyer and seller valuations widened and the cost of debt financing rose.
Citigroup chief executive Jane Fraser described the deal flow as healthy in remarks to investors. Her view was that advisory work and capital markets activity both find their gravitational pull in the US. Revenue at the bank picked up across European and Asian markets, while domestic business accounted for the bulk of overall activity.
Corporate planning conversations held their momentum inside executive suites, while budgets earmarked for new investment weathered the pressure of elevated borrowing costs. Conditions for deal activity were characterised by Fraser as broadly favourable.
JPMorgan's equity trading arm brought in $5 billion — a 49 percent rise — while stock-market desks across the industry posted broad revenue gains. Equities trading at Goldman Sachs brought in $6.4 billion, a figure reflecting a rise of more than 70 percent against the prior period. Borrowing arrangements were put in place by hedge funds to support their open market positions.
Bond desks absorbed the turbulence of fluctuating prices, while equity traders and others operating across different market segments found conditions that allowed for gains. Elevated volatility in rate markets and a broad retreat from bonds weighed on client participation, pushing JPMorgan's fixed-income trading revenue down by 4 percent. At Bank of America, that category contracted by 17 percent, while Goldman Sachs posted numbers in the same area that held essentially unchanged. Citigroup alone moved against the broader trend, posting a 4 percent gain driven by activity in foreign exchange and spread products.
JPMorgan chief executive Jamie Dimon conveyed a measured outlook, telling those present that conditions had held up well and that he hoped a favourable stretch lay ahead. In a briefing with analysts, Dimon said the timing of any resolution remained unclear. Goldman Sachs chief executive David Solomon disputed the notion that conditions had reached a ceiling, telling an audience that the impulse to declare a turning point was something he understood well. Solomon added that pinpointing the top of the curve remains an uncertain exercise.
Five of the six largest banks posted net income above prior-year levels, with Goldman's earnings climbing 29 percent, while one executive described the current environment for capital markets activity as falling within the top quartile of historical performance.
Bank of America's investment banking division posted $1.8 billion in revenue during that stretch — down 11 percent from what the unit had recorded in the comparable period a year earlier. Consulting revenue contracted by 19 percent, while the volume of debt issued dropped 14 percent. A notice issued by the bank around mid-September put the projected drop in fees at a floor of ten percent.
Trading desks in the region posted returns that fell short of those at comparable firms, a gap attributed in part to mounting unease over how artificial intelligence companies are being valued. Uneven activity in that market, alongside a climb in yields, led portfolio managers to reassess the valuations they were willing to pay. Shares in a cluster of chipmakers declined for six consecutive sessions, while the S&P 500 closed out its most sustained stretch of low volatility since 2020.
Volatility-targeting funds that had structured their exposures around expectations of calm price action found those assumptions upended when market swings intensified, a shift that dampened investor appetite for new equity offerings. In deals where sellers had anticipated one price, the bids that arrived often came in 10 to 15 percent below that mark, according to bankers familiar with the transactions.
Solomon noted that a valuation coming in 10% to 15% below expectations could lead a buyer to walk away from a deal or hold off until conditions shift. Advisory fees reached a record level as completed transactions drew down Goldman's investment banking pipeline, which had edged lower from where it stood at the end of the prior quarter.
Transaction volumes across portions of the market reached their highest recorded levels in the opening six months of 2026, with analysts attributing the upturn to demand that had built up over an extended period of restrained activity. Transactions of the scale seen in SpaceX's anticipated listing, alongside large deals in energy and technology, have pushed expectations across the market to a notably elevated level.
Vacation season gave way to a stretch of market turbulence. Ten-year Treasury yields wrapped up the quarter with one of their steepest climbs recorded over recent years. Fresh inflation figures deepened concerns about the path of interest rates, while gains in stock trading helped cushion weakness across other parts of the market.
Hedge fund prime brokerage held up as a dependable revenue stream, while wealth management and related services acted as a stabilising force at certain institutions. Borrowing remained on an upward trajectory, if unhurried, while the overall quality of the loan book showed no meaningful deterioration. Funding costs climbed at a measured pace as interest rates moved upward, while lending portfolios on both the retail and commercial sides held without any notable deterioration.
Pricing alignment between buyers and sellers takes time following a rate selloff, Barnum noted. Fraser brought up ongoing conversations with clients and open exchanges at board level. In remarks on corporate planning, Solomon described businesses as taking an assertive, forward-leaning posture toward their strategic direction. Solomon also pointed out that the trajectory of appetite for capital and computing resources as the broader AI ecosystem continues to take shape remains difficult to predict.
Trading was muted, with a portion of equities slipping after investors judged that earnings beats had narrowed compared with earlier reporting cycles.
