By Manya Saini
July 16 (Reuters) - Wall Street's biggest banks found few reasons to complain this earnings season. Investment bankers were busier than they have been in years, trading desks thrived on volatility and resilient consumers kept lending businesses humming.
Here are the key trends from second-quarter results at the biggest U.S. banks, which often set the tone for the earnings season:
INVESTMENT BANKING WINDFALL
Wall Street's mega-IPOs and multibillion-dollar deals fueled a surge in investment
banking fees, lifting them to their highest level since the pandemic-era boom of 2021. The bumper activity was headlined by the historic listing of Elon Musk's SpaceX.
Global investment banking revenue topped $60 billion in the first six months of the year, Dealogic data showed, with JPMorgan leading the league tables, followed by Goldman Sachs and Morgan Stanley.
Executives cited healthy pipelines and strong backlogs for the second half, fueling expectations that the investment banking "super cycle" still has further to run.
TRADING DESKS CASH IN ON VOLATILE MARKETS
Stock trading delivered blowout results as volatile markets kept trading desks on their toes in the second quarter. AI-related jitters, Middle East tensions and swings in energy markets drove client activity.
Market turbulence is often good for trading desks. Sharp price swings encourage investors to reposition portfolios, hedge risks and seize short-term opportunities.
STRONG LOAN GROWTH FUELS INTEREST INCOME
Steady loan demand supported higher net interest income in the second quarter. Consumers remained resilient and spending stayed healthy, helping sustain borrowing.
"Consumer spending is solid, consumer credit remains durable and commercial defaults appear to be declining," said Brian Mulberry, senior client portfolio manager at Zacks Investment Management, which owns several bank stocks.
While the prospect of a potential interest-rate hike later this year due to concerns over inflationary pressures could weigh on loan growth, analysts said second-quarter results exceeded expectations.
Executives said the U.S. economy remains robust and that they have yet to see any meaningful change in consumer behavior.
PROFITS VS WALL STREET EXPECTATIONS
All six major U.S. banks trounced Wall Street's second-quarter profit expectations, with several analysts and investors describing the scale of the earnings beats as "extraordinary".
STOCK PERFORMANCE IN 2026
Here is a rundown of Reuters' coverage of big banks' earnings:
• JPMorgan posts highest quarterly profit ever by a U.S. bank as dealmaking, stock trading surge
• Goldman Sachs profit tops estimates on trading boom, corporate deal spree
• Wells Fargo beats profit estimates on trading boom, loan growth
• BofA rides market whiplash to trading records, deal activity shines
• Citi shares fall as investor worry over expenses overshadows second-quarter profit beat
• Morgan Stanley beats profit estimates on dealmaking boost, strong trading
(Reporting by Manya Saini in Bengaluru; Editing by Arun Koyyur)
