On Thursday, US bank stocks soared to an all-time high as investor sentiment turned optimistic on the prospects of a deal to de-escalate tensions with Iran and a record-breaking initial public offering from SpaceX.

The KBW Bank Index surged 1.9% to close at 176.73, surpassing its previous record high of 176.40 set on February 9th. All 24 banks within the index closed higher, with Citigroup Inc (C.US) and The Goldman Sachs Group, Inc. (GS.US) leading the gains.

The broader market also rebounded, with the S&P 500 index climbing 1.8%. The rally began around 1:30 PM New York time, when US stocks jumped after the President canceled a planned military strike on Iran and suggested a deal was close, while crude oil prices fell, stoking hopes for an end to the conflict that has roiled global markets.

The bullish sentiment surrounding bank stocks was further bolstered by the upcoming initial public offerings of major private tech companies SpaceX, Anthropic, and OpenAI. Shares of both Goldman Sachs and Morgan Stanley (MS.US) consolidated near record highs after being selected as joint lead underwriters for the SpaceX IPO led by Elon Musk.

Anthropic, the developer of the Claude chatbot, and OpenAI, the creator of ChatGPT, have also chosen Morgan Stanley and Goldman Sachs to lead their respective public offerings. According to a statement on its website Thursday, SpaceX raised $75 billion, setting a record for the largest IPO ever.

"The strong performance of bank stocks reflects the potential resolution of the Middle East conflict and overall market optimism ahead of the SpaceX IPO," said industry research analyst Herman Chan.

Earlier in the week, at the Morgan Stanley US Financials Conference in New York, CEOs of major US investment banks praised consumer resilience. Chan noted that executive presentations "offered positive commentary on market activity, loan growth, credit quality, and the resilience of consumer spending." He added that the operating backdrop for banks also appears constructive.

Marianne Lake, head of Consumer & Community Banking at JPMorgan Chase & Co., stated that the company's credit card charge-off rates this year are at the low end of its expected range. Meanwhile, Wells Fargo & Company CFO Mike Santomassimo pointed out that consumer card spending in May grew 9% year-over-year, with credit performance also better than anticipated.

Cross-Asset Trading Momentum Ignites Bullish Outlook

The second quarter of 2026 is showcasing remarkable momentum across global financial markets. After a period of caution and adjustment, cross-asset trading activity is flourishing. All signs indicate that Wall Street's top financial institutions are entering a 'golden quarter' with performance that could far exceed expectations.

Judging from the recent stream of optimistic signals from executives, the dual tailwinds of high market turnover and robust corporate activity are significantly boosting major banks' sales, trading, and investment banking revenues, making the market's previously cautious consensus appear overly conservative.

Recently, executives from two Wall Street giants, Bank of America Corporation (BAC.US) and Citigroup (C.US), have issued consecutive optimistic forecasts. Both banks' latest projections indicate that their second-quarter trading revenues will substantially outperform prior industry-wide expectations, thanks to a broad-based recovery in cross-asset class trading and sustained high market volumes.

Jim DeMare, co-president of Bank of America, stated that the growth momentum in the bank's trading business is strengthening, with revenue growth now expected to be higher than the 15% increase the bank forecast last month. "I think we'll be a little bit better than that," DeMare said Tuesday at the Morgan Stanley Financial Services Conference.

Citigroup CFO Gonzalo Luchetti said the bank is poised for strong gains from cross-asset trading, and the momentum appears more durable than at the start of last year. Luchetti, also speaking at the Morgan Stanley conference on Tuesday, indicated the bank's markets revenue is on track for a high-single-digit to low-double-digit percentage increase. This far exceeds the 2% growth forecast by analysts in a Bloomberg survey.

The robust market activity is not only creating waves in secondary markets but is also transmitting positively to primary markets and corporate services, with the long-sluggish investment banking business reaching a critical inflection point in Q2 2026.

In this红利 period driven by market activity, the trading divisions of Wall Street's major banks have become the most direct beneficiaries, with several institutions revising their second-quarter performance guidance upward. As the July earnings season approaches, Wall Street banks are positioned to deliver a collective report card that surpasses market expectations, setting an optimistic tone for the second half of the year in global financial markets.

Against a backdrop of marginally looser monetary policy and improving corporate earnings expectations, this recovery cycle for the banking sector may extend for a longer duration.