Key facts
- Investment banking fees at the six largest U.S. banks increased by an average of 45% in the second quarter compared to the previous year.
- Goldman Sachs reported its advisory backlog reached a five-year high.
- U.S. IPOs raised a record $104.8 billion in the second quarter, boosted by the SpaceX listing.
- Global M&A volumes exceeded $3 trillion in 2026, a 40% increase year-over-year.
- AI-related companies and their suppliers have been key drivers of M&A activity.
Wall Street's investment banking sector is experiencing a significant revival, with major U.S. banks reporting a 45% average increase in fees during the second quarter. This surge is attributed to a broad strengthening of deal activity, including a record number of initial public offerings (IPOs) and a boom in mergers and acquisitions (M&A).
Goldman Sachs CEO David Solomon highlighted that the bank's backlog has reached its highest level in five years, indicating sustained future activity. Years of market volatility, elevated interest rates, and regulatory scrutiny had previously suppressed deal-making, but these factors have been overcome by renewed confidence.
The IPO market saw record proceeds of $104.8 billion in the second quarter, largely driven by the significant listing of Elon Musk's SpaceX. This has reopened a crucial exit channel for private equity and venture capital firms. Citigroup CEO Jane Fraser expressed optimism about the pipeline for the second half of the year and indicated plans to invest in talent to capture market share, particularly in M&A.
Global M&A volumes have surpassed $3 trillion in 2026, marking a more than 40% increase from the previous year. Technology companies, especially those in the AI sector and its supporting infrastructure, have been at the forefront of this dealmaking surge. Activity has also accelerated in the healthcare, utilities, and energy sectors. Analysts at Morningstar believe the current investment banking 'super-cycle' has further potential, with no significant contraction anticipated before 2028.