Trading surge, helped by SpaceX IPO, seen boosting U.S. bank earnings
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- SpaceX's near $86 billion IPO generated approximately $500 million in banking fees and will be a major equities trading tailwind for Goldman Sachs and Morgan Stanley in Q2 results due July 14-15, with the two banks having had the biggest roles in the deal.
- Goldman Sachs advised on more than $1 trillion in announced M&A in H1 2026 — a record half-year pace for any investment bank — while global investment banking revenue overall hit $61.4 billion, a 24% jump year-over-year, per Dealogic data.
- Trading revenue is expected to rise at least 15% year-over-year at the largest global banks, with equities set as the primary growth engine, per Coalition Greenwich analysts Angad Chhatwal and Jamie Vickers, amid above-usual volatility from geopolitical tensions and AI-related disruption.
- Morningstar's Sean Dunlop cautioned that Q2 trading revenue may slow compared to Q1, when unusually high volatility from the "initial Iran war shock" and related inflation and interest-rate repricing drove elevated activity.
- Bank executives' own Q2 guidance points to gains: JPMorgan's IB fees up 10%+, Bank of America's markets revenue exceeding 15% growth, Citi's trading up high-single to low-double digits with IB up mid-teens, and Wells Fargo's net interest income set to "step up."
- Loan growth and net interest margin expansion provide a second tailwind, with U.S. Federal Reserve data showing loan growth accelerated in Q2 on robust commercial and industrial lending, though analysts flagged credit metrics and loan demand as the key swing factors for H2 2026.
Why it matters: Goldman Sachs and Morgan Stanley, which had the biggest SpaceX IPO roles, are positioned to outperform peers in Q2 equity trading, with the $86 billion deal alone generating roughly $500 million in fees. But Dunlop's caveat that Q2 trading may decelerate from Q1's Iran-war-volatility-driven spike means investors should parse whether July 14-15 results reflect durable SpaceX/M&A tailwinds or a harder-to-repeat volatility bump, even as loan growth and the strongest deal-making environment in years keep the structural backdrop intact.
