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After a blockbuster 2025 filled with massive mergers and headline IPOs, Wall Street’s investment banks are heading into 2026 with fresh momentum. Major U.S. lenders say corporate clients are once again willing to pursue big transactions, and the fee pool is growing fast.

The result: dealmakers who expected a slowdown are instead preparing for another high-intensity year across mergers, acquisitions, and public listings. (With inputs from Reuters.)

Big Banks Signal a Strong Start to 2026

America’s largest banks just delivered a clear message alongside their latest earnings: investment banking activity isn’t cooling off, it’s picking up speed.

Goldman Sachs reported a sharp rise in investment banking fees in the fourth quarter, fueled by a stronger flow of dealmaking. Morgan Stanley also posted a major jump in investment banking revenue, reflecting a broad rebound in corporate transactions.

Citigroup, meanwhile, recorded its strongest-ever year for M&A advisory revenue, underscoring how much the deal environment improved over the past 12 months.

Dealmaking Fees Rise, But Not Everyone Beats Forecasts

While the overall picture was upbeat, results across Wall Street weren’t uniformly explosive.

Bank of America’s investment banking fees in the quarter increased only slightly, suggesting some areas of the market remain uneven. JPMorgan also faced a tougher reception from investors after reporting weaker-than-expected performance in its investment banking unit, weighed down by difficult year-over-year comparisons.

Even so, JPMorgan still brought in the most investment banking fees across the industry in 2025, according to Dealogic data cited in the report.

Executives Point to an “Accelerating” Pipeline

Bank leaders are increasingly confident that the next wave of deals is already forming.

Morgan Stanley CFO Sharon Yeshaya told Reuters that the firm is seeing a faster-building pipeline in both mergers and IPOs. She also pointed to healthcare and industrials as areas where deal activity could be especially active.

At JPMorgan, CFO Jeremy Barnum echoed the same tone during the bank’s post-earnings call, telling analysts the firm expects continued deal engagement in 2026, an expectation reflected in its pipeline.

Global Investment Banking Revenues Crossed $100 Billion

One of the most telling signs of the comeback: global investment banking revenue surpassed $100 billion in 2025, according to Dealogic figures referenced in the report.

That threshold matters because it signals the recovery many bankers had been waiting for finally arrived after years of deal drought.

For much of the recent past, higher interest rates and volatile markets made it harder for boards and investors to agree on pricing, slowing IPO plans and freezing M&A discussions before they reached the finish line.

Why 2025’s Rebound Caught Many Off Guard

What made 2025 even more notable was that the strong return of dealmaking came despite a political and economic shock that many expected would derail it.

The report noted that activity held up even after President Donald Trump announced sweeping tariffs on major global economies in the spring, a move that rattled markets and raised fears of broader instability.

Instead of collapsing, deal flow proved resilient, and in some cases accelerated into the final months of the year.

2026 IPO Watchlist Expands With Mega-Names

The IPO pipeline for 2026 is attracting fresh attention, especially as more high-profile companies are reported to be exploring listings.

Among the names mentioned in the report: OpenAI, SpaceX, and AI chipmaker Cerebras. Their inclusion reflects growing investor appetite for scale, technology leadership, and recognizable brands, particularly in the AI ecosystem.

A stronger IPO calendar would also be a meaningful shift from the quieter public markets of recent years, when many companies delayed listings due to uncertain valuations and weak demand.

Expert View: Tailwinds Are Lining Up

Macrae Sykes, a portfolio manager at Gabelli Funds, told Reuters he expects 2026 to deliver heavy IPO issuance and a strong slate of announced M&A.

He pointed to several supportive forces in the backdrop, including solid economic growth, deregulation, and the lagging effects of a lower cost of capital following Federal Reserve rate cuts in 2025.

That combination, cheaper funding and improving confidence, has historically been a powerful mix for dealmaking.

Wells Fargo Says Its Pipeline Is the Best in Years

Wells Fargo CEO Charlie Scharf said the bank entered 2026 with a deal pipeline stronger than at any point in the last five years, though he cautioned that market conditions can shift quickly.

The statement matters because Wells Fargo has been working to expand beyond its traditional consumer-lending identity and become a bigger player in investment banking.

Scharf said the bank advised on two of the biggest M&A deals in 2025 and improved its standing in announced M&A rankings, rising to eighth place from 12th the year before.

Private Equity and Venture Capital May Re-Enter the Arena

Another force expected to reshape deal volume in 2026: sponsor-led activity.

Private equity and venture capital firms have spent years waiting for a more favorable exit environment, one where valuations feel realistic again and investors are willing to back large transactions.

If IPO markets stay open and M&A pricing becomes easier to negotiate, sponsors could return in a bigger way, adding more volume to the advisory pipeline across Wall Street.

Mega-Deals Returned in 2025, Setting a High Bar

Large transactions were back in fashion in 2025, including Electronic Arts’ proposed $55 billion take-private deal.

If completed, the transaction would become the largest leveraged buyout ever, highlighting how aggressively buyers are willing to move when financing conditions and strategic logic align.

Deals of that scale don’t just generate enormous fees, they often reset expectations across entire sectors, encouraging other companies to explore consolidation or strategic alternatives.

A Late-Year Surge Kept Bankers Working Through the Holidays

The report described an unusually intense year-end rush, with advisers from Wall Street to London’s Canary Wharf pushing deals forward deep into the holiday period.

That kind of late burst is often seen as a signal of confidence: companies don’t push major transactions into the final stretch unless they believe timing and market conditions are favorable.

It also suggests many firms wanted to lock in momentum before uncertainty could return.

Warner Bros. Discovery Deal Drama Shows M&A Isn’t Simple

Not every transaction is clean or predictable, even in a strong market.

The report noted that Warner Bros. Discovery’s sale has become more complicated as Netflix and Paramount Skydance compete for the historic studio. Analysts suggested that if a major deal succeeds, it could encourage more M&A by showing that regulatory barriers may not be as daunting as once feared.

In other words: one big closing could unlock a broader wave of corporate confidence.

Trading Desks Also Enjoyed a Strong Year

It wasn’t only investment bankers who benefited from 2025’s market climate.

A choppy year for both stocks and bonds boosted trading revenue across major firms, as investors repositioned amid uncertainty around the Fed’s policy direction, concerns about market valuations, and broader economic questions.

Goldman Sachs reported record equities trading revenue in the fourth quarter. Morgan Stanley also posted a sharp rise in equities and fixed-income trading, mirroring gains seen at rivals like JPMorgan and Bank of America.

Market Volatility May Keep Trading Strong in 2026

David Wagner, head of equities and portfolio manager at Aptus Capital Advisors, told Reuters that policy turbulence often drives more reactive trading behavior from investors.

He said that environment can increase skepticism and trigger faster decision-making, resulting in more frequent trades. Wagner added that this trend could persist into 2026, particularly in a midterm election year, which historically tends to bring larger market drawdowns during the year.

What This Means for 2026: Bigger Pipelines, Higher Stakes

The message from bank executives is clear: dealmaking is no longer in recovery mode, it’s moving into expansion.

A fuller IPO calendar could give venture-backed companies and late-stage private firms long-awaited exit routes.

Meanwhile, stronger M&A pipelines suggest corporate leaders are shifting from caution to action, whether that means consolidation, strategic acquisitions, or restructuring to compete in a rapidly changing economy.

For Wall Street, that translates into more advisory fees, stronger underwriting activity, and sustained demand for trading services, especially if volatility remains elevated.

Wall Street Enters 2026 With Momentum

After years of uncertainty, 2025 delivered the kind of rebound investment banks had been waiting for, and early signals suggest the pace may not slow in 2026.

With pipelines building, IPO candidates stacking up, and trading desks thriving in volatile markets, the industry is heading into the year with confidence and urgency.

Whether markets stay calm or turn turbulent, one thing seems certain: Wall Street’s deal machine is running hot again.

(According to a Reuters report.)

 

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