The annual trading revenue of Wall Street's five major banks has reached a record high, but is this only the beginning?
After a record-breaking year in trading, executives from Wall Street’s five biggest banks unanimously agree that the boom is far from over. Morgan Stanley CEO Ted Pick described the current situation as “very ideal.”
Last year, the five largest banks on Wall Street had total trading revenue of $134 billion, setting a new historical record, accompanied by a revival in M&A activity. Although uncertainty remains in the market, several executives predict that 2026 will be “a very, very good year.” After Morgan Stanley and Goldman Sachs reported strong quarterly results on Thursday local time, their stock prices rose by 5.8% and 4.6% respectively—the biggest single-day jump since April.
Although the Trump administration’s unpredictable policies and developments in trade negotiations have intensified market volatility, these also brought significant opportunities to bank trading operations, as investors frequently adjust positions and trading activity continues to climb. Meanwhile, moderate easing of regulations and expectations of Federal Reserve rate cuts are reviving the previously sluggish M&A market, injecting new vitality into investment banking operations.
Including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, total profits for six major U.S. banks reached their highest level since 2021 last year. Throughout the year they returned over $140 billion to shareholders, surpassing the previous historical record set in 2019. Behind this series of strong data, the banking industry appears to be heading into another boom cycle.
Trading boom still in the "mid-game"; policy environment provides support
Morgan Stanley CEO Ted Pick used a vivid analogy to outline prospects to analysts: The current trading boom is like a baseball game in the “middle innings,” and “we’re in the ideal batting position.” He particularly pointed out that the trading business is booming, but investment banking is on a different pace — the latter “is still in an earlier developmental stage.”
Goldman Sachs revealed that its pipeline for advisory, bond, and equity underwriting has climbed to one of its strongest historical levels. CEO David Solomon stated clearly that the current global situation is setting a favorable environment for M&A and capital markets activity in 2026.
On the policy side, deregulatory moves by the Trump administration and the Fed’s interest rate path are reshaping the market ecosystem. Although the president’s policy swings and developments in trade negotiations keep investors cautious, the resulting market volatility instead creates opportunities for trading business, forcing clients to continually adjust positions to adapt.
This situation stands in stark contrast to other banking segments. For example, the credit card business faces threats from Trump administration demands to cap interest rates, and industry leaders are still struggling to devise response strategies while closely watching the White House’s next moves.
Industry peers remain optimistic
Other major banks are also sending similar positive signals. JPMorgan Chase CFO Jeremy Barnum stated:
“Constructive market dynamics have already been reflected in our business pipeline.”
Bank of America CFO Alastair Borthwick likewise pointed out that “investment banking fees are showing strong growth momentum.”
However, several executives are simultaneously raising caution. They note that current asset prices are historically high, implying that if the value of stocks and other assets sees a significant correction, trading activity could be dampened. JPMorgan CEO Jamie Dimon especially warned that, despite seemingly robust economic performance, “there are major potential risks,” which could abruptly change the market landscape.
Cautious in maintaining current targets
Despite the overall positive outlook, banking leaders remain prudent on specific profit forecasts. Morgan Stanley executives revealed that the company has not yet raised its performance targets, and any related adjustments may need to wait until the second half of this year. Pick admitted:
"There’s a certain degree of pressure to keep up with targets. Once an original target is met, the market tends to expect a higher standard to be set."
It is worth noting that the six largest banks cut a total of about 10,600 jobs last year—the highest in nearly a decade. Some institutions have hinted they may continue cost optimization. Despite continued investment in technology upgrades, many banks have made it clear that improving operational efficiency is now a main business focus.
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