Bank of America shares fall ~5% as CEO forecasts 10%-20% drop in Q3 investment banking fees
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Bank of America (BAC) stock closed roughly 5% lower on Monday after CEO Brian Moynihan delivered an underwhelming forecast for the bank's quarterly dealmaking and trading fees at a Barclays conference. Moynihan said investment banking fees are on pace to reach $1.6 billion to $1.8 billion in the third quarter, down about 10%-20% from the $2 billion earned in the same period last year. The broader investment banking market is down roughly 28% year-over-year, according to Dealogic data. Moynihan noted the deal pipeline remains strong but deals need to get through the system. The bank's sales and trading business is expected to be flat from a year ago, with financing and prime brokerage activity cooling as investors pulled back on risk. The downshift is expected to make it harder for the bank to show revenue growth outpacing expenses. Moynihan attributed the pullback partly to a sharp unwind of the global AI trade in July. Other Wall Street banks also fell, with Goldman Sachs and Morgan Stanley down 4% and 3% respectively, while JPMorgan, Citigroup, and Wells Fargo fell 1%-2%. Citigroup's CFO reported a stronger outlook with mid-single-digit market revenue growth. Moynihan was more upbeat about Main Street operations, saying loans and deposits are growing and net interest income is tracking in line with expectations. He expressed confidence in the US economy, adding that a potential Fed rate hike should not derail the current trajectory.
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David Hollerith · Senior Reporter Mon, September 14, 2026 at 1:26 PM PDT · 3 min read
Bank of America (BAC) stock closed roughly 5% lower on Monday after CEO Brian Moynihan delivered an underwhelming forecast for the bank's quarterly dealmaking and trading fees.
Moynihan said on Monday that investment banking fees are on pace to reach $1.6 billion to $1.8 billion in the third quarter, down about 10%–20% from the $2 billion it earned in the third quarter of last year.
According to Dealogic data, the broader investment banking market is down roughly 28% from the third quarter of last year, with about half a month left to go.
"We're not as well-positioned in some of the businesses that have more activity," Moynihan said at a financial services conference hosted by Barclays, adding that the deal pipeline remains strong and "part of it is just getting the deals through the system."
Bank of America's sales and trading business, meanwhile, is poised to be flat from a year ago. Moynihan noted that the financing and prime brokerage activity that boosted results earlier this year cooled over the summer as investors pulled back on risk.
The downshift in quarterly Wall Street revenue is expected to make it more difficult for the Charlotte, N.C.-based bank to show revenue growth outpacing expenses during the period, Moynihan acknowledged.
"There's always a quarter where the thing goes quickly," he said, adding that "it takes you a quarter or two to get back underneath it."
Bank of America CEO Brian Moynihan attends a session during the 56th annual World Economic Forum meeting in Davos, Switzerland, on Jan. 20, 2026. (Reuters/Denis Balibouse)
The pullback in trading comes after the global AI trade faced a sharp unwind in July, as shares of tech giants and chipmakers faced mounting valuation scrutiny amid a capital expenditure binge to build out their AI capabilities.
During the same period, AI-focused hedge fund Situational Awareness, run by former 24-year-old OpenAI (OPAI.PVT) researcher Leopold Aschenbrenner, faced a dramatic wipeout.
Shares for other Wall Street banks also tumbled on Monday:
- Goldman Sachs (GS) fell 4%
- Morgan Stanley (MS) fell 3%
- JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) were down between 1% and 2%
At Citigroup, Wall Street's outlook for the quarter appears considerably stronger. CFO Gonzalo Luchetti told investors at the same conference that market revenue is tracking toward mid-single-digit growth from a year ago, helped by equities, financing, and foreign exchange. Citi also expects investment banking revenue to rise by the low single digits, with potential upside depending on deals completed before quarter-end.
Bank of America's Moynihan was far more upbeat about the bank's Main Street-focused operations. He said loans and deposits are growing, and net interest income is tracking in line with the bank's expectations.
"We feel very good about the underlying US economy," he said, adding that even if the Federal Reserve raises interest rates this week, it should not knock the economy off its current trajectory.
David Hollerith covers a range of developments throughout the financial sector, from Wall Street to banking and asset management to crypto and fintech. Email him at david.hollerith@yahoofinance.com. Follow him on X at @DsHollers.
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Bank of America CEO forecasts Q3 investment banking fees down at least 10% year-over-year