Wall Street is witnessing a sharp split in trading fortunes, as JPMorgan Chase (NYSE: JPM) projects robust third-quarter trading revenue and investment banking fees, contrasting directly with the cautionary outlook issued by Bank of America (NYSE: BAC) earlier this week. JPMorgan Co-President Doug Petno stated Tuesday that trading revenue for the quarter ending September 30 is expected to climb by a high-single to low-double digit percentage, adding that investment banking fee income could rise at a similar pace. His comments came just a day after Bank of America CEO Brian Moynihan, speaking at the same conference, indicated that third-quarter revenue would be "roughly flat" compared to the same period last year, citing a pullback in financing activity partly driven by slower prime brokerage balances in Asia.

Following Petno's remarks, JPMorgan shares advanced 1.3% to $354.50 at 3:35 p.m. in New York trading, erasing earlier losses. Wall Street's trading desks have performed strongly this year, propelled by heightened geopolitical tensions that have boosted market volatility. For JPMorgan, robust trading gains helped the bank post a record profit in the second quarter. Petno noted the bank still holds a strong deal pipeline, and earlier this month, Dorothy Blessing, co-head of global investment banking at JPMorgan, said dealmaking appears on track for a record-breaking year. The broader market has also benefited from major initial public offerings, including SpaceX's historic listing earlier this year, while AI firm Anthropic PBC has been selecting underwriters for its highly anticipated IPO.

In stark contrast, Bank of America CEO Moynihan surprised investors by revealing that trading revenue would be "roughly flat" versus last year's third quarter, breaking from the surge seen across Wall Street in the first half. On Monday, Moynihan projected investment banking fees of approximately $1.6 billion to $1.8 billion for the quarter, well below analyst expectations near $2 billion. Following his comments, Bank of America shares plunged as much as 6% intraday Monday, marking the steepest intraday drop since last April, before closing 5.1% lower, the worst performer in the KBW Bank Index. Moynihan explained that equity trading revenue had risen so far this quarter, while fixed income had declined and oscillated within a range, resulting in flat overall trading revenue. Analysts at Keefe, Bruyette & Woods noted the financing pullback reflects slower international and Asian prime brokerage balances.

The Federal Reserve is set to meet on benchmark interest rates later this week, a decision Moynihan said should help restore some stability. "Interest rates will eventually settle at some point, and I think that will aid a portion of trading activity," he commented. "However, on the debt financing side—a significant part of activity—the issue is you need a rate structure that doesn't oscillate back and forth, so people feel comfortable committing to issuance." Wall Street traders continue to extend their stellar start to the year, with Bank of America's equity traders posting record revenue in the second quarter. Markets have experienced sustained volatility, including a selloff in AI-related stocks in July and recent declines in chipmaker shares as AI executives signal a slowdown in their expansion plans. Despite these challenges, Moynihan said this year remains likely to be strong for Bank of America's markets business, with the sales and trading team aiming for a 17th consecutive quarter of growth.

Regarding the bank's dealmaking operations, Moynihan noted that Bank of America is not as favorably positioned in the sectors where M&A activity has been more robust in recent months. However, he said the deal pipeline remains strong and simply requires momentum to push transactions through. Wells Fargo analyst Mike Mayo said in a report that Moynihan's characterization of the issue as more about business mix than execution "continues the narrative of Bank of America underperforming peers in capital markets." On Monday, Moynihan said he felt "very good" about the bank's guidance for net interest income, which represents earnings from interest-bearing assets minus costs. The company has projected NII growth at the upper end of its 6% to 8% range for 2026.