Wall Street banks delivered exceptional profits, sailing past analyst forecasts in the third quarter, propelled by robust trading desk performance and a marked resurgence in dealmaking activity.
JP Morgan, Goldman Sachs and Citigroup exceeded projections on Tuesday, with Jamie Dimon's banking behemoth securing $14.4bn (£10.8bn) in profit – representing a 12 per cent annual increase, as reported by .
The bank's turnover climbed nine per cent to $47.2bn. Simultaneously, Citi's revenue jumped to $22bn, comfortably beating forecasts of $21bn.
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Bank of America, the country's second-biggest lender, posted a 10.8 per cent rise in revenue to $28.2bn.
Morgan Stanley and Goldman Sachs reported on Wednesday, each delivering 18 and 20 per cent surges in revenue respectively.
"The thing about choppy waters is that they create opportunities, and the market volatility experienced over the past few months has created the perfect environment for US investment banks to thrive," said Danni Hewson, head of financial analysis at AJ Bell.
Banking chiefs celebrate dealmaking quarter
Trading arms at the institutions sustained momentum from the year's opening half when President Donald Trump's tariff campaign helped investment banking earnings soar.
Lenders also started to reap substantial benefits from the Trump administration's deregulatory approach, which has unleashed a surge in dealmaking activity. JPMorgan chief financial officer Jeremy Barnum described the past summer as the "busiest" period in a "long time" for announced M&A activity.
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Morgan Stanley claimed the top spot for the largest haul from equities trading with a 35 per cent surge in revenue to $4.1bn.
Goldman Sachs' investment banking division helped drive the firm's quarterly performance, with fees leaping 42 per cent to $2.7bn – nearly $500m above analyst forecasts. The bank reported its pipeline of potential transactions at the quarter's end reached a three-year peak.
Chief executive David Solomon noted that the "momentum from the first half of the year persisted through the summer and into September".
This emerges during a turbulent spell for US investors, with the government shutdown causing delays to vital employment data that could influence Federal Reserve interest rate decisions.
Hewson commented: "Investors still expect the US Fed to continue its rate cutting into 2026 and for that to have an impact on the big banks' net interest income, but mega deals might suffer if the US economy shows further signs of deterioration, with huge concerns about the state of the jobs market which can't be properly assessed whilst the government shutdown continues."
Barclays will launch third quarter reporting season for FTSE 100 banks on 22 October.