Wall Street's largest banks delivered historic performance in the second quarter of 2026, with Goldman Sachs leading the charge by posting record quarterly revenue from its prime brokerage business, according to BigGo Finance. The firm's equity financing revenue skyrocketed 91% year-over-year, driven by explosive growth in Asia and pushing average prime balances to an all-time high. Across its fixed income, currencies, and commodities (FICC) and equities businesses, financing revenues jumped 62% to $4.5 billion, accounting for roughly 37% of the division's total top line. Goldman CEO David Solomon attributed the strength to robust artificial intelligence capital formation and investment, with client activity particularly strong in Asia. As reported by Bloomberg, CFO Denis Coleman noted that the bank identified Asia as a strategic growth area for its prime business, making the decision to start ramping up investments in the first quarter, which has now resulted in sustained revenue growth and an even larger capital cushion entering the second half. Market revenue is expected to be up at least 15% year-on-year for the largest global banks, according to Coalition Greenwich head Angad Chhatwal, with equities set to be the primary engine of growth.
JPMorgan Chase delivered exceptional results with revenue from its markets business surging 35% during the June quarter, fueled primarily by its prime brokerage operation that raked in $6 billion, representing an 86% leap from the same period last year. As reported by BigGo Finance, CFO Jeremy Barnum noted that flows were strong and trading was favorable in both derivatives and cash, with Prime benefiting from higher client activity and balances. The scale of the equity trading boom is unprecedented, with Goldman Sachs producing $7.4 billion in equities revenue during the quarter, up 72% from a year earlier - a number that slightly exceeds the firm's full-year equities result in 2019. Bank of America reported a 70% jump, and even Citigroup's 45% growth rate was considered remarkable in any other context. Bloomberg reports that Morgan Stanley also raked in big gains from its Prime brokerage unit, driven by higher average customer balances and robust growth in Asia, with CEO Ted Pick noting there is a lot of demand for that capital inside the four walls of our global firm. Wall Street giants, including Goldman Sachs and Morgan Stanley, which had big roles in the nearly $86 billion SpaceX IPO, will likely outperform in equities, according to Morningstar analyst Sean Dunlop.
The current trading surge is being fueled by an artificial intelligence investment cycle that shows no sign of cooling, with Morgan Stanley projecting that AI spending could reach $1.3 trillion next year, potentially creating further demand for capital across the market. Goldman's Solomon noted that the AI cycle is expanding capital requirements into infrastructure, energy, and data centers, creating ripple effects across multiple industries. The monster IPO of Elon Musk's SpaceX in June served as both a direct fee bonanza and an accelerant for broader market activity, delivering roughly $500 million in fees to a consortium of banks, with Goldman and Morgan Stanley reportedly collecting about $100 million each for their lead roles. Global investment banking revenue hit $61.4 billion in the first half of 2026, a 24% jump from a year earlier, according to Dealogic data, with JPMorgan remaining the global leader in investment banking revenue and Goldman Sachs the global leader in M&A advisory. As Bloomberg reports, Wall Street's biggest prime brokerages have been buoyed by surging valuations, tailwinds from AI demand, growth in regions like Asia, and a spate of record-breaking equity issuances.
Banks will also benefit from loan growth and expansion in net interest margin, with U.S. Federal Reserve data suggesting loan growth accelerated in the second quarter, underpinned by robust momentum in commercial and industrial loans. JPMorgan's investment banking fees could rise 10% or more in the second quarter, CEO Jamie Dimon told an investor conference in May, while Bank of America may exceed the initial forecast of 15% growth in second-quarter markets revenue, fueled by the equities business. Citigroup expects trading revenue to rise between high-single and low-double digits in the second quarter, with investment banking revenue expected to rise by a mid-teen percentage. Goldman Sachs has managed to advise on more than $1 trillion worth of announced mergers and acquisitions so far in 2026, marking a record pace for any investment bank within a half-year period. Jefferies analyst David Chiaverini noted that while some uncertainty persists from geopolitical factors and market volatility, many banks are reporting that clients are increasingly viewing the current environment as the 'new normal' and continuing to move forward with investment plans.
