Wall Street's largest banks have started 2026 on a strong note, with equity capital markets (ECM) revenue showing robust growth despite the Iran conflict suppressing IPO activity. Data indicates that Goldman Sachs (GS.US) and JPMorgan Chase (JPM.US) led in revenue generated from leading IPOs and stock offerings in the first quarter, securing $535 million and $472 million respectively. Compared to the same period in 2025, the top five banks all achieved double-digit percentage growth. The surge in underwriting fees stems from generally healthy trading activity in the first quarter, even as the market experienced significant volatility and a spike in volatility rates during this period due to the war involving the US, Israel, and Iran. Even with a slowdown in the US IPO market, where March deal volume fell to its lowest level in nearly a year, bank executives predict a rebound is imminent. Goldman Sachs CEO David Solomon stated on the bank's earnings call, "There's no question IPO activity has slowed, impacted by the Middle East conflict, particularly in March. Ultimately, the stock market has shown remarkable resilience, and if that continues, I believe you will see IPO activity accelerate again." As US equity capital markets activity grew, Goldman Sachs surpassed its competitors. Convertible bonds dominated US ECM deals this quarter, highlighted by Oracle Corporation's issuance of $5 billion in mandatory convertible bonds, while Nebius Group NV raised $4.3 billion through a single issuance of two bond types. The firm behind last year's largest IPO, the $7.2 billion debut of medical supplies giant Medline Inc., contributed to the largest US stock reduction in the first three months of 2026, as some of the medical company's private equity backers sold $3.5 billion worth of shares. Additionally, Western Digital's sale of shares in its former subsidiary, SanDisk, raised $3.2 billion. In contrast, the IPO market has drawn more attention for its setbacks, including LiftOff Mobile Inc. and Clear Street Group Inc., both of which postponed their listing plans in February following an escalation of the Middle East war. Nonetheless, given SpaceX's plan for a potential record-breaking IPO this year, alongside Anthropic and OpenAI preparing for multi-billion dollar IPOs, it is easy to foresee major banks booking substantial commissions by year-end. With an increasing number of companies beyond these three preparing to go public, executives have expressed optimism. Morgan Stanley CEO Ted Pick believes that if the market can recapture the momentum it had entering 2026, the pipeline for IPOs and mergers and acquisitions will become active again, noting a strong desire among private equity firms to monetize their portfolios. Pick stated, "I do think, in this environment, not every company can successfully execute an IPO. The market will be selective. What we are seeing is that the largest asset managers and the largest private equity firms—some of whom have very high-quality companies—are likely to move first." Citigroup (C.US) led its peers in growth of stock underwriting revenue, which increased 64% in the first quarter compared to the same period last year. Chief Financial Officer Gonzalo Luchetti said on the earnings call that growth in follow-on offerings and the convertible bond business contributed to this increase. The rebound in US stock markets and equity-related sales is now evident. The CBOE Volatility Index (VIX) is fluctuating around 17, while the one-month implied volatility for the S&P 500 has retreated to pre-war levels. As traders push stock prices higher amid optimism about a US-Iran ceasefire, the US stock market benchmark index is poised to achieve its first record closing high since January.