Wall Street Harvests Record Fees Thanks to SpaceX Listing and Revival of Major Deals
Wall Street banks recorded their largest investment banking fee revenues in approximately four and a half years, driven by the massive initial public offering (IPO) of SpaceX and a resurgence in major merger and acquisition (M&A) activity.
Estimates compiled by Bloomberg indicate that the top five U.S. investment banks—JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup—are poised to announce a 27% year-on-year growth in investment banking fees during the second quarter. This would bring total fees to approximately $11.1 billion, the highest level since 2021.
These gains followed the best quarterly performance for U.S. stocks in six years, despite volatility linked to the Iran war. This upward trend, which lasted until the end of June, was further supported by the artificial intelligence investment boom, falling oil prices, and resilient consumer spending.
Equity capital markets activities accounted for a significant portion of the revenues, with fees for the five banks expected to reach approximately $2.5 billion. This is primarily attributable to the SpaceX IPO, which generated nearly $500 million in fees for 23 investment banks, marking the highest fee payout in the history of an IPO. According to the Financial Times, as reported to Al Arabiya Business, Goldman Sachs and Morgan Stanley each earned approximately $100 million from the deal.
Brian Mulberry, chief market strategist at Zachs Investment Management, stated that the sheer size of the SpaceX deal was substantial enough to have a tangible impact on the results of all participating banks.
Bankers and analysts have highlighted the growing number of technology companies poised for public listings, including SpaceX, OpenAI, and Anthropic. Meanwhile, activity for smaller offerings backed by private equity funds has remained subdued due to high interest rates.
M&A fees for the five banks surged by approximately 30% compared to the same period last year, with expectations for them to exceed $4 billion for the first time since 2021 over three consecutive quarters. Wall Street benefited from the return of deals valued at over $10 billion, while Morgan Stanley noted that global M&A announcements in 2026 are trending toward record highs.
JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and Wells Fargo are preparing to announce their results this week, amid expectations of combined earnings of nearly $44 billion in the second quarter, an 18% increase year-on-year.
Trading desks also benefited from financial market volatility through the execution and financing of client transactions, with equity trading activity showing particularly strong growth. Furthermore, limited loan losses supported bank profits and contributed to their stock prices outperforming the broader market over the past two years.
Despite these strong results, investor expectations for the sector have risen. Sol Martinez, head of U.S. financial equity research at HSBC, noted that the market has become more demanding, adding that while the current quarter looks good, stock prices already reflect a significant portion of these expectations.
At the same time, investors monitored banks’ balance sheets for any signs of weakness among U.S. consumers, who have shown resilience in the face of tariffs, geopolitical tensions, and rising oil prices. Martinez warned that a renewed escalation of conflict and a resurgence in oil prices could bring inflationary pressures back to the forefront and negatively affect economic growth forecasts.
