Publication date: 13 October 2026
Large US banks entered earnings season with a split message about the financial system. Market volatility is generating strong trading revenue, but the same uncertainty is slowing the corporate deals that would signal confidence in investment and financing.
JPMorgan, Goldman Sachs, Citigroup and Wells Fargo reported uneven third-quarter results against a backdrop of war in the Middle East, higher inflation, rising bond yields and concern about the cost of the artificial-intelligence build-out. Clients traded actively as they repositioned portfolios, while some merger, acquisition and capital-markets activity weakened.
Volatility rewards the trading desk
JPMorgan said revenue in its markets division rose 15% from a year earlier, led by a 49% increase in equities revenue. Goldman Sachs reported net revenue of $18.68 billion, net earnings of $5.29 billion and annualised return on equity of 18.7%.
These figures show why diversified investment banks can perform well in unsettled markets. Rapid moves in interest rates, energy prices and equities create demand for execution, hedging and financing. Volatility is difficult for investors but can produce more client activity and wider opportunities for market-making desks.
Deals require a different kind of confidence
Investment banking depends on companies being willing to commit to acquisitions, listings and long-term capital raising. That activity is more sensitive to uncertainty about borrowing costs and valuations.
Citigroup said investment-banking activity softened in the quarter. Wells Fargo also pointed to a slowdown in September and the effect of the sharp rise in the benchmark 10-year US Treasury yield. A deal can be postponed when financing becomes expensive or buyers and sellers cannot agree on price. A hedge against market risk often cannot.
The result is a bank earnings cycle in which trading strength can mask hesitation in the real economy. High revenue from market turbulence does not necessarily mean corporate leaders feel ready to invest.
The pipeline is not the same as completion
Bank executives continue to describe their deal pipelines as strong. That is encouraging, but a pipeline measures potential work. Revenue depends on transactions reaching completion.
The conversion rate will be shaped by the path of interest rates, energy prices and equity valuations. If yields stabilise, companies may regain confidence in pricing debt and acquisitions. If they rise further, postponements may continue even when strategic interest remains.
What the results tell leaders
For investors, the quality of earnings matters as much as the headline. Trading income can be powerful but volatile. Advisory and underwriting revenue can provide evidence that business confidence is returning, while lending data helps show whether companies and households are still willing to borrow.
For corporate leaders, the banks’ results are a reminder that access to capital is open but more selective. Strong institutions can still finance transactions, yet the price of uncertainty is visible in slower decisions and higher return requirements.
Wall Street is profitable in the turbulence. A broader financial recovery will require the turbulence to ease enough for clients to act.