JPMorgan (JPM) and Bank of America (BAC) have offered sharply contrasting outlooks for their third-quarter results. JPMorgan expects trading revenue and investment banking fees to achieve mid-to-high-range growth and says it has a strong deal pipeline, while Bank of America has warned that revenue will be roughly flat and that investment banking fees will fall short of analyst estimates, sending its shares sharply lower. Although Bank of America still has bright spots in equities trading and is striving to achieve a 17th consecutive quarter of growth for its sales and trading team, its overall performance in the capital markets arena still faces questions. The Federal Reserve’s interest rate decision and the stability of the rate structure will become key factors affecting subsequent trading activity.
JPMorgan co-President Doug Petno said on Tuesday that trading revenue for the quarter ending September 30 is expected to rise by the mid-to-high range of a low-teens percentage. He also said JPMorgan’s investment banking fee revenue could rise by a similar magnitude. Just a day earlier at the same conference, Bank of America Chief Executive Officer Brian Moynihan said third-quarter revenue would be “roughly flat” compared with the same period in 2025. Moynihan said the bank saw a pullback in financing activity, partly because of a slowdown in Asia prime brokerage balances. After Petno finished speaking, JPMorgan shares rose 1.3% to $354.50 at 3:35 p.m. New York time, erasing earlier losses.
Wall Street’s trading desks have performed strongly so far this year, partly because rising geopolitical activity has increased volatility in financial markets. For JPMorgan, strong trading gains helped the bank post a record profit in the second quarter. Petno said the bank still has a strong pipeline in its investment banking business. Earlier this month, JPMorgan global co-head of investment banking Dorothee Blessing said dealmaking appears on track for a record year. Wall Street has also benefited from large IPOs, including SpaceX’s record listing earlier this year. Artificial intelligence company Anthropic PBC has been looking for underwriters for its highly anticipated IPO.
Earlier, Bank of America CEO Moynihan said trading revenue would be “roughly flat” compared with the third quarter of last year, unexpectedly breaking the surge Wall Street had seen in the first half. Moynihan said on Monday that investment banking fee revenue is expected to be about $1.6 billion to $1.8 billion. Analysts had previously expected those fees to be closer to $2 billion. After Moynihan made the remarks, Bank of America shares fell as much as 6% during Monday trading, the biggest intraday drop since April last year. The stock eventually closed down 5.1%, the worst performer among members of the KBW Bank Index.
In an interview, Moynihan said that at Bank of America, equities trading revenue has risen so far this quarter, while the fixed-income business has declined and fluctuated within a range. He said this is expected to leave total trading revenue for the quarter flat.
The Federal Reserve will meet later this week on its benchmark interest rate. Moynihan said the decision should help bring some stability. This year is still likely to remain strong for Bank of America’s markets business. The bank’s sales and trading team is aiming for a 17th consecutive quarter of growth. Moynihan said on Monday that he feels “very good” about the company’s guidance for net interest income. The company has said it expects NII growth in 2026 to be at the upper end of the 6% to 8% range.
