Wall Street giants’ trading operations show a tale of two extremes: JPMorgan (JPM.US) expects a surge in Q3 performance, while Bank of America (BAC.US) warns of a slowdown

According to Zhitong Finance APP, JPMorgan Chase (JPM.US) expects to see growth in trading revenue and investment banking fees in the third quarter, which stands in stark contrast to the warning issued by Bank of America (BAC.US) earlier this week.

JPMorgan Chase Co-President Doug Petno said on Tuesday that trading revenue for the quarter ending September 30 is expected to increase in the mid-to-upper teens percentage range. He also stated that JPMorgan’s investment banking fee income may rise by a similar margin.

Just a day earlier at the same conference, Bank of America CEO Brian Moynihan said that third-quarter revenue would be “essentially flat” compared to the same period in 2025. Moynihan attributed the slowdown in financing business partly to a decline in Asian prime brokerage balances.

After Petno’s remarks, JPMorgan’s stock price rose 1.3% to $354.50 at 3:35 p.m. New York time, erasing earlier losses.

This year, Wall Street’s trading divisions have performed strongly, partly as a result of increased geopolitical activity, which has heightened volatility in the financial markets. For JPMorgan, robust trading gains contributed to record profits in the second quarter.

Petno noted that the bank’s investment banking business still has a strong pipeline of deals. Earlier this month, JPMorgan’s Global Co-Head of Investment Banking, Dorothy Blessing, said that dealmaking appears to be on track for a record year.

Wall Street also benefited from large IPOs, including SpaceX’s record-breaking listing earlier this year. AI company Anthropic PBC has been seeking underwriters for its hotly anticipated IPO.

Previously, Bank of America CEO Moynihan remarked that trading revenue would be “essentially flat” compared to last year’s third quarter, a surprising reversal from the surge seen across Wall Street in the first half of the year.

On Monday, Moynihan said investment banking fee income is expected to be in the range of $1.6 billion to $1.8 billion. Analysts had previously expected these fees to be closer to $2 billion.

Following Moynihan’s remarks, Bank of America’s stock price fell as much as 6% intraday on Monday, marking the largest intraday drop since April last year. The stock ultimately closed down 5.1%, the worst performer among KBW Bank Index components.

In an interview, Moynihan said that at Bank of America so far this quarter, equities trading income has increased, while fixed income business has declined and fluctuated within a range. He said this is expected to leave total trading revenue flat for the quarter.

Analysts at Keefe, Bruyette & Woods noted in a report that part of the business slowdown is due to a decline in balances among international and Asian prime brokers.

The Federal Reserve is scheduled to meet later this week to discuss benchmark interest rates. Moynihan said that this decision should help bring some stability.

He said, “Interest rates will stabilize at some point, and I think that’ll help a portion of trading activity, but on the debt financing side—which is a significant part of the business—the problem is you need a rate structure that doesn’t keep moving around so that people can confidently commit to issuing.”

Wall Street traders are continuing their strong start to the year; Bank of America's equity traders posted record revenues in the second quarter.

Markets have remained volatile, and AI stocks saw a sell-off in July. Recently, as AI executives suggested slowing development, chipmaker stocks have declined.

Moynihan said that nevertheless, this year is still likely to be strong for Bank of America’s markets business. The bank’s sales and trading team is aiming for its 17th consecutive quarter of growth.

NII Growth

Regarding the bank’s dealmaking business, Moynihan said that in sectors where M&A activity has been more vibrant in recent months, positioning is not as advantageous. But he said the deal pipeline remains strong; it’s just a matter of moving deals through the process.

Wells Fargo analyst Mike Mayo wrote in a report that Moynihan said this is more about business structure rather than execution capabilities, a statement that “extends the narrative of Bank of America underperforming peers in capital markets.”

On Monday, Moynihan said he feels “very good” about guidance for the company’s net interest income (NII, which is income derived from interest-bearing assets less expenses). The company has said it expects NII growth to be at the upper end of the 6%-8% range by 2026.