On Wednesday, US bank stocks experienced a broad rally, with Morgan Stanley (MS.US) climbing more than 6%, marking its largest intraday increase since May 12. Bank of America (BAC.US) rose over 4%, while JPMorgan Chase (JPM.US) and Wells Fargo (WFC.US) increased by over 2%. BlackRock (BLK.US) also saw a gain of over 1%.

Notably, Morgan Stanley's Q3 earnings exceeded expectations across the board, with a rebound in investment banking driving performance, alongside strong contributions from its equity business. The firm reported net revenue of $18.22 billion for the third quarter, representing an 18% year-on-year increase, and surpassing the estimated $16.64 billion. Earnings per share for Q3 were $2.80, with a return on equity of 18%, exceeding the forecast of $13.4. The investment banking segment saw a year-on-year growth of 44%, generating $2.108 billion in revenue, while equity sales and trading revenue amounted to $4.12 billion, far exceeding the expected $3.41 billion.

Additionally, Bank of America's Q3 performance also outperformed expectations, primarily due to a long-awaited resurgence in M&A activity that propelled growth in its investment banking business, along with net interest income that exceeded analyst forecasts. The bank posted Q3 revenues of $28.09 billion, an 11.0% increase year-on-year, with earnings per share reaching $1.06, surpassing market expectations.