Wall Street’s biggest banks delivered strong second-quarter earnings, offering a much-needed boost to investor sentiment amid lingering concerns over US trade policy. Goldman Sachs, Morgan Stanley, and Bank of America all beat analyst expectations, driven largely by robust trading activity and selective dealmaking. However, the shadow of President Trump’s sweeping tariffs continues to temper market enthusiasm.Goldman Sachs led the charge with a 22% jump in earnings to $3.7 billion, fuelled by a record-breaking quarter in equities trading, which surged 36%. Investment banking fees rose 26%, driven by a rebound in M&A advisory activity.
CEO David Solomon struck an optimistic tone, calling the deal-making environment “remarkably resilient” and expressing confidence in the investment banking outlook. Still, he cautioned that policy developments rarely unfold in a straight line, underscoring the importance of risk management.
Morgan Stanley also posted impressive results, with net income rising to $3.5 billion, or $2.13 per share, beating analyst estimates of $1.96. Revenue climbed to $16.8 billion, supported by a 23% rise in equities trading and a 9% increase in fixed income. Institutional Securities revenue hit $7.6 billion.
However, investment banking lagged, with advisory revenue falling to $508 million due to fewer completed M&A deals. CFO Sharon Yeshaya attributed the slowdown to tariff-related uncertainty but noted improving conditions. CEO Ted Pick highlighted a rebound in capital markets in the latter half of the quarter.Bank of America rounded out the trio with solid earnings, reporting $0.89 per share versus the expected $0.86. Net interest income reached $14.67 billion, and trading revenue adjusted for Debit Value Adjustment (DVA) came in at $5.38 billion, both beating forecasts.
CEO David Solomon struck an optimistic tone, calling the deal-making environment “remarkably resilient” and expressing confidence in the investment banking outlook. Still, he cautioned that policy developments rarely unfold in a straight line, underscoring the importance of risk management.
Morgan Stanley also posted impressive results, with net income rising to $3.5 billion, or $2.13 per share, beating analyst estimates of $1.96. Revenue climbed to $16.8 billion, supported by a 23% rise in equities trading and a 9% increase in fixed income. Institutional Securities revenue hit $7.6 billion.
However, investment banking lagged, with advisory revenue falling to $508 million due to fewer completed M&A deals. CFO Sharon Yeshaya attributed the slowdown to tariff-related uncertainty but noted improving conditions. CEO Ted Pick highlighted a rebound in capital markets in the latter half of the quarter.Bank of America rounded out the trio with solid earnings, reporting $0.89 per share versus the expected $0.86. Net interest income reached $14.67 billion, and trading revenue adjusted for Debit Value Adjustment (DVA) came in at $5.38 billion, both beating forecasts.
Total revenue rose 4% year-over-year to $26.61 billion, just shy of expectations. Despite trimming its stake in 2024 and early 2025, Warren Buffett’s Berkshire Hathaway continues to hold a significant position in the bank, valued at around $29 billion.
With inputs from agencies
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(Edited by : Ajay Vaishnav)
First Published: Jul 16, 2025 9:46 PM IS
