Wall Street banks are set to report their biggest investment banking fee haul in four and a half years, driven by SpaceX's blockbuster IPO and a resurgence in mega-mergers. The five largest US investment banks — JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup — are forecast to report a 27% year-on-year fees increase in Q2 to $11.1bn, the highest since 2021.

Equity capital markets fees are predicted to total $2.5bn across the five banks, largely from the $500mn in fees on SpaceX's IPO — the highest ever for a public offering. Goldman and Morgan Stanley each pocketed $100mn. M&A fees are also forecast to jump ~30% to over $4bn, the first time since 2021 above that level for three consecutive quarters.

The six major banks including Wells Fargo are expected to report Q2 profits of ~$44bn, up 18% YoY. Trading divisions benefit from volatile markets, particularly equities. However, analysts like Saul Martinez at HSBC warn the bar is higher for bank stocks, which have outperformed for two years. Investors will watch balance sheets for consumer stress amid Iran war and tariff uncertainties.