Introduction
On July 14 and 15, 2026, the biggest names on Wall Street reported the second quarter, and the headlines were not subtle. Goldman Sachs posted the best three months in its 157-year history. JPMorgan booked the largest quarterly profit any US bank has ever recorded. Morgan Stanley, Citigroup, and Bank of America all cleared expectations, several of them setting records of their own. If you are recruiting for investment banking, this is the earnings season interviewers will ask about, because it captures almost everything happening in the industry right now: a trading boom, a reopened IPO window, and the return of the megadeal.
This post breaks down what actually happened, what drove it (the answer is more interesting than "the market went up"), which banks won where, and what a quarter like this signals for hiring, bonuses, and recruiting. It closes with how to turn all of this into a sharp answer when an interviewer asks the near-inevitable question: "What did you take from bank earnings?"
The Scoreboard: Who Reported What
Five banks did the heavy lifting in the mid-July reporting window. Here is the quarter at a glance before we get into what the numbers mean.
| Bank | Headline result | Diluted EPS | Standout driver |
|---|---|---|---|
| Goldman Sachs | Record net revenues $20.34B | $20.98 | Equities trading $7.42B, up 72% |
| JPMorgan | Record profit $21.2B | $7.70 | Equities markets $6.0B, up 86% |
| Morgan Stanley | Record net revenues $21.3B | $3.46 | Wealth net new assets $148B |
| Bank of America | Net income $9.1B | $1.21 | Strong global markets and banking |
| Citigroup | Revenue $24.8B, up 14% | $3.15 | Best quarterly revenue in a decade |
The pattern is consistent across the table: capital markets businesses, meaning trading and underwriting, carried the quarter, while steady lending and wealth businesses added ballast. That mix matters, and we will come back to why.
- Net revenues
A bank's total revenue after subtracting interest expense, so it nets interest income against interest paid out. For a firm like Goldman Sachs, net revenues is the standard top-line figure quoted, combining fees, trading gains, and net interest income. It is the number to watch because it captures the whole franchise, not just one segment.
Goldman Sachs: the best quarter in its history
Goldman generated record net revenues of roughly $20.34 billion and diluted earnings per share of $20.98, with net earnings of about $6.63 billion. The engine was its Global Banking and Markets division, which produced record net revenues near $15.5 billion, up roughly 53% year over year. Within that, equities trading set a firm record at $7.42 billion, up 72%, and fixed income, currencies, and commodities added $4.6 billion. Investment banking fees reached $3.40 billion, up 55%, led by a 130% surge in equity underwriting. The firm reported a return on equity of 23.5%, an exceptional figure for a large bank, and said its deal backlog sat at the highest level in five years.
JPMorgan: the biggest profit ever, with an asterisk
JPMorgan reported record net income of $21.2 billion, or $7.70 per share, on managed revenue of $58.0 billion, up 27%. Every one of its lines of business posted record revenue. Investment banking fees rose 30% to $3.3 billion, the highest since 2021, and equity markets revenue jumped 86% to $6.0 billion. There is a nuance worth carrying into any interview, though.
Morgan Stanley: a wealth machine with a trading kicker
Morgan Stanley reported record net revenues of $21.3 billion and net income of $5.6 billion, or $3.46 per share, up from $2.13 a year earlier. Its Institutional Securities arm hit a record $11.0 billion, with equities up 69% and investment banking revenue up 58% to $2.4 billion. Just as important, its Wealth Management business set a record at $8.9 billion and pulled in $148 billion of net new client assets in a single quarter, with much of that tied to clients cashing in on IPOs, as Morgan Stanley's second-quarter results detailed. That combination, a cyclical trading surge sitting on top of a stable fee-based wealth business, is Morgan Stanley's whole strategy in one quarter.
Bank of America and Citi round out the picture
Bank of America earned net income of $9.1 billion, or $1.21 per share, and returned $8.0 billion to shareholders through dividends and buybacks, with management pointing to strong global markets and investment banking. Citigroup posted revenue of $24.8 billion, up 14%, and earnings of $3.15 per share, up 61%, which the bank called its best quarterly revenue in a decade in its second-quarter earnings release. Notably, Citi's stock still fell on the day because management held its full-year guidance and signaled more spending, a useful reminder that a record quarter and a rising share price are not the same thing.
What Actually Drove the Record
"The market was strong" is a non-answer. The interesting question is which businesses drove the beat, because trading, equity underwriting, and M&A advisory are different engines with different implications for the industry and for the jobs you are recruiting into.
Trading was the single biggest engine
The largest chunk of the upside came from sales and trading, not from advisory fees. Volatility around geopolitics, interest rates, and the ongoing artificial intelligence boom kept institutional clients trading heavily, and equities desks in particular printed records. JPMorgan and Goldman together beat estimates for equities trading by billions. Trading revenue is genuinely different from banking fees: it comes from facilitating client transactions and market-making, so it swells when markets are volatile and active, whereas advisory fees depend on deals closing. If you want the full picture of how these revenue streams differ, our breakdown of how investment banks make money walks through fee income, trading, and net interest income as separate levers. This post is about a single quarter; that one is the durable model behind it.
The IPO window reopened, and underwriting fees followed
The second driver was equity capital markets. After a slow stretch, the IPO market roared back in the first half of 2026, and equity underwriting fees jumped accordingly, up 130% at Goldman and a standout line at JPMorgan. Blockbuster listings drove the fee pool: the long-awaited SpaceX IPO alone reportedly generated around $500 million in fees for its underwriting banks, according to CNBC's bank earnings takeaways, and other large offerings like Cerebras and a roughly $85 billion Alphabet share sale added to the haul. We cover the listings wave in depth in our look at why the 2026 IPO boom took off, and the SpaceX deal specifically in our piece on the largest IPO in history. For earnings purposes, the takeaway is simple: reopened equity markets flow straight into underwriting fees, which sit inside the investment banking line.
- Investment banking fees
The revenue a bank earns from advising on and executing transactions, split into three buckets: advisory (M&A), equity underwriting (IPOs and follow-on stock sales), and debt underwriting (bond and loan issuance). When a bank reports "investment banking fees up 30%," it is aggregating all three. Breaking the figure into its parts tells you whether advisory, ECM, or DCM did the work.
M&A advisory and the return of the megadeal
The third engine was mergers and acquisitions. Large-cap deal activity surged through the first half of 2026, and advisory fees rose as a result, though more modestly than trading or equity underwriting in percentage terms. Goldman's advisory revenue rose 17% to about $1.4 billion, and the bank sat at the top of the global M&A advisory rankings, having worked on more than $1 trillion of announced deals in the first half alone, a record half-year pace for any bank. Rising backlogs across the group point to more advisory revenue still to be recognized in coming quarters. The forces behind that deal wave, cheaper financing, pent-up sponsor demand, and a friendlier regulatory tone, are the subject of our explainer on why M&A is booming in 2026; this post simply shows that boom landing in the numbers.
A record quarter is exactly what interviewers ask about: Practice discussing bank earnings, deal drivers, and valuation with worked answers, start practicing interview questions for free and find your gaps before an interviewer does.
Who Won Where
Aggregate records are one thing, but interviewers love a candidate who can say which bank led which category. The industry keeps score through league tables, and the first half of 2026 produced a clear pecking order.
- League table
A ranking of investment banks by their activity in a category over a period, such as M&A advisory, equity underwriting, or total fees. Compiled by data providers like Dealogic and LSEG, league tables are how banks measure competitive standing and how they pitch for new business. A top-three position is a genuine selling point in a pitch.
The industry-wide fee pool hit a record
Global investment banking revenue reached roughly $61.4 billion in the first half of 2026, up 24% from a year earlier, according to Dealogic data. That is the pool that advisory, ECM, and DCM fees are drawn from, and its growth is why so many banks reported record banking lines at once. A rising tide genuinely did lift the group, even as individual banks jockeyed for share. For more on how these rankings are constructed and why banks obsess over them, see our guide to investment banking league tables.
JPMorgan led fees, Goldman led M&A
Two banks stood out at the top. JPMorgan remained the global leader in total investment banking revenue, reflecting the breadth of its franchise across advisory, equity, and debt. Goldman Sachs led specifically in M&A advisory, the highest-prestige corner of the business, consistent with its long-standing strength in advising large corporations on transformational deals. Morgan Stanley, meanwhile, posted one of the fastest investment banking growth rates among the majors at 58%, showing how quickly a reopened market can lift a smaller banking franchise off a lower base.
Diversification separated the winners
One quieter theme: the banks with large, stable businesses alongside their capital markets arms looked the most resilient. Morgan Stanley's wealth management franchise and Bank of America's consumer bank provide ballast when trading eventually cools. Pure capital markets strength is thrilling in a boom, but the market rewards firms that can hold up when the cycle turns. That tension, cyclical upside versus durable earnings, is a sophisticated point to raise if an interviewer pushes you past the headline.
What the Quarter Signals for Recruiting
Records are not just trivia. A quarter like this shapes the environment you are recruiting into, and connecting the dots is where candidates earn credibility.
Bonuses are likely to rise
When banking and trading revenues surge, the compensation pool that funds analyst and associate bonuses tends to expand. Strong 2026 revenue across advisory, ECM, and trading points toward healthier bonuses than the leaner years that followed the 2022 slowdown, particularly for people in the businesses that drove the beat. Compensation is never a straight pass-through from revenue, and banks manage the pool carefully, but the direction of travel is favorable. Our investment banking salary and bonus guide explains how the pool is set and why bonuses swing with the cycle.
Hiring is a more complicated story
More revenue would normally mean more hiring, and dealmaking desks are indeed busy. But 2026 carries a wrinkle: banks are simultaneously investing heavily in automation, and some have signaled that technology and artificial intelligence will let them handle more work without proportional headcount growth. JPMorgan, even while posting records, has talked openly about using AI to reshape roles. The upshot for candidates is that demand is real but selective, weighted toward people who can do the analytical and relationship work that is hardest to automate. We dig into this dynamic in our piece on whether AI will replace investment banking analysts.
The recruiting climate is a candidate's friend, for now
A busy, profitable Wall Street is a better backdrop to recruit into than a quiet one. Active deal pipelines and rising backlogs mean teams need capacity, and a strong revenue year gives banks confidence to bring on classes. That said, cycles turn, and several bank leaders used their earnings calls to sound a note of caution about how long the good conditions will last. Recruiting into a boom is an advantage, but it is not a guarantee that the boom holds through your start date.
Get the complete guide: Download our comprehensive 160-page PDF, covering the technical questions, valuation frameworks, and market context you will need across the full interview.
How to Talk About Bank Earnings in an Interview
"What did you take from bank earnings?" or "What are you seeing in the market?" is a common question, especially in the weeks after a reporting season. Here is how to answer it well.
Build a three-part answer
Structure beats a data dump. A strong response moves from the fact, to the driver, to the implication, in a few tight sentences.
Lead with the headline fact
Name what happened and be specific: Goldman posted a record quarter and JPMorgan its largest-ever profit in Q2 2026.
Explain the driver
Say what powered it, and be precise that trading and a reopened IPO market did more of the work than pure M&A advisory.
Draw an implication
Connect it to the industry: strong capital markets, rising deal backlogs, and a favorable but cyclical hiring and bonus environment.
Anchor it to one or two real numbers
You do not need to memorize the full income statement. One or two well-chosen figures signal that you actually read the news rather than skimmed a headline. Good anchors from this quarter include Goldman's record equities trading revenue near $7.42 billion, JPMorgan's investment banking fees up 30% to $3.3 billion, or the industry-wide first-half fee pool of roughly $61.4 billion. Pick figures you can explain, not just recite.
Avoid the common mistakes
A few errors reliably undercut an otherwise good answer. Steering clear of them is half the battle.
- Being vague. "Banks did really well" says nothing. Name a bank, a number, and a driver.
- Confusing the engines. Do not attribute a trading-led quarter to M&A. Know which business drove the result.
- Reciting without understanding. If you quote a figure, be ready to explain what it means and why it moved.
- Ignoring the caveats. Mentioning that JPMorgan's headline number included one-time gains, or that a record quarter did not lift every stock, shows genuine depth.
If the interviewer asks you to go deeper on a specific transaction rather than the sector, that is a different skill, and our guide to discussing a deal you followed covers how to structure that answer.
Key Takeaways
- Q2 2026 was a genuine record. Goldman Sachs posted its best quarter ever and JPMorgan the largest profit of any US bank, reported July 14-15, 2026.
- Trading led, not advisory. Sales and trading, especially equities, drove the biggest surprise, followed by a reopened IPO market and then M&A advisory.
- The fee pool hit a record. Global investment banking revenue reached roughly $61.4 billion in the first half of 2026, up 24%, per Dealogic.
- JPMorgan led fees, Goldman led M&A. Know the league-table split; it is a detail interviewers reward.
- Read past the headline. JPMorgan's record profit was flattered by a Visa gain; the underlying figure was strong but lower.
- The signal for candidates is positive but cyclical. Bonuses likely improve and hiring is active, though AI and a possible turn in the cycle temper the picture.
- Structure your interview answer. Fact, driver, implication, anchored to one or two real numbers you can explain.
Conclusion
The second quarter of 2026 gave Wall Street the kind of numbers that make front-page news: the best quarter in Goldman Sachs history, the biggest profit a US bank has ever posted, and a first-half fee pool at record levels. For a candidate, the value is not in memorizing every figure but in understanding the story underneath them. This was a trading and capital markets quarter first, an M&A quarter second, and it landed against a backdrop of reopened IPO markets, surging deal backlogs, and a hiring picture complicated by automation.
Interviewers ask about earnings season because it is a fast, honest test of whether you follow the industry the way someone who wants to work in it would. Being able to name what happened, explain what drove it, and connect it to hiring, bonuses, and the health of the business puts you ahead of the many candidates who can only say "banks had a good quarter." Keep your example current, anchor it to a number or two you genuinely understand, and be ready to acknowledge the caveats. Do that, and a record earnings season becomes one of the easiest questions you will get.
