Wall Street’s major banks anticipate a robust dealmaking year in 2026, though Middle East geopolitical turmoil has notably tempered executive optimism. Investment banking fees, earned from advising on mergers and acquisitions (M&A) and underwriting deals, experienced an average surge of 27% across six major U.S. banks during the first quarter. This record dealmaking activity emerged as a pivotal profit driver. Executives across the industry point to healthy pipelines and expect continued dealmaking growth, though the U.S.-Israeli conflict with Iran and broader economic uncertainties present ongoing risks should regional instability persist.
Industry-wide investment banking revenue jumped 14% to US$28.2 billion in the first quarter, according to Dealogic data. JPMorgan is a global financial services firm. The biggest U.S. bank by assets, it claimed the top spot, closely followed by Wall Street powerhouses Goldman Sachs and Morgan Stanley. Global M&A revenue alone surged 19% to a record US$11.3 billion during the period, with the value of announced deals hitting US$1.38 trillion—the second-highest first quarter on record. Activity was largely spearheaded by technology—particularly artificial intelligence—alongside healthcare and financial services, accounting for the largest transactions.
Despite strong current performance, bank chief financial officers have voiced cautious optimism. JPMorgan CFO Jeremy Barnum noted that while “planning, engagement and pipelines remain healthy,” Middle East events “could have an impact on deal execution and timing.” Morgan Stanley CFO Sharon Yeshaya acknowledged that volatility influences boardroom discussions, but the strategic necessity for growth or capital access endures. A strong pipeline of high-profile companies—including Elon Musk’s SpaceX, OpenAI, and Anthropic—is expected to enter public markets this year. These listings are set to bolster Wall Street banks through substantial underwriting fees, despite recent IPO slowdowns noted by Goldman Sachs CEO David Solomon.
