Bank of America's CEO, Brian Moynihan, announced on September 14 that the bank's trading revenue for the third quarter would be "relatively flat" compared to the same period last year. This contrasts sharply with the first half of 2026, which saw a surge in trading activity, including a 33% increase in BofA's trading revenue in Q2. Moynihan also projected investment-banking fees to be between $1.6 billion and $1.8 billion, falling short of the nearly $2 billion analysts had expected and representing a roughly 10% decline year-over-year. Following these remarks, Bank of America shares dropped as much as 6%, marking their largest intraday decline since April of last year.
Nomura Holdings Inc. echoed this sentiment, reporting on September 14 that revenue from its global trading and investment banking business had increased "modestly" this quarter, a slowdown from the double-digit growth experienced in the previous two quarters. While equity products, foreign exchange, and emerging markets have remained solid or recovered, rates trading has been challenging. Nomura's wholesale division, which accounts for over half of its overall income, had seen a 41% jump in net revenue in the fiscal first quarter ending June 30.
Other Wall Street firms have shown mixed signals. JPMorgan Chase forecasts gains in trading revenue, while Goldman Sachs CEO David Solomon noted that fixed income trading has been softer compared to the "very strong" equity trading. Citigroup's CFO Gonzalo Luchetti also cautioned that investment banking was tracking for only low-single-digit revenue growth in Q3, with trading heading for mid-single-digit growth, a significant deceleration from their blockbuster Q2. Analysts like Masao Muraki of SMBC Nikko Securities suggest that the rise in interest rates has dampened investor activity and made position management more difficult.
The slowdown comes amidst several headwinds, including oil prices above $100 per barrel due to geopolitical tensions, and the 10-year Treasury yield hovering near 5%, increasing financing costs for deals. The Federal Reserve was also expected to hike rates by 25 basis points, pushing the federal funds rate to 4.0%. While deal pipelines remain full, the current economic conditions are making corporate decision-makers hesitant to close deals. The first half of 2026 saw global investment banking revenue reach $61.4 billion, a 24% jump from the prior year, making the current deceleration particularly notable.
