Six major US banks are set to release earnings: Q2 revenue is expected to jump 26%; SpaceX IPO and the Iran conflict are the biggest profit drivers

The Wall Street earnings season is about to begin! According to CNBC, buoyed by SpaceX’s record-breaking IPO and market volatility sparked by the Middle East-Iran conflict, the six major U.S. banks’ Q2 2026 earnings are expected to start in the red. Analysts expect a double-digit, explosive jump in revenue from investment banking and trading businesses; at the same time, AI infrastructure investment and solid consumer credit are also giving the banking industry a rare “sweet spot.”
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• Investment banking and trading double engines explode, expected to surge 26%
• SpaceX IPO and geopolitics are the biggest drivers
• AI lifts commercial lending, consumer credit remains steady
• Regulatory easing is a positive, the market focuses on forward outlook

As Q2 2026 comes to a close, global markets are once again turning their attention to the Wall Street giants that control the world’s financial lifeblood. This week, major U.S. banks will gradually reveal their latest earnings reports. Broadly, the market expects that, driven by multiple macro catalysts, the banking industry will deliver an extremely impressive performance.

Based on a special report published by CNBC on July 13, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs are expected to release their Q2 earnings before the opening bell on Tuesday (14), while Morgan Stanley will go last on Wednesday (15).

Investment banking and trading double engines explode, expected to surge 26%

KBW analyst Chris McGratty offered a highly optimistic outlook. He expects that, compared with the same period last year, Wall Street investment-banking revenue could surge as much as 26%, while total trading revenue is also expected to rise 14%.

Wells Fargo’s senior banking analyst Mike Mayo was even more direct: the industry is currently in a rare “sweet spot.” Wall Street’s two major profit engines—capital markets businesses (investment banking and trading) and the real-economy businesses on Main Street (business and consumer lending)—are showing a rare, synchronized growth pattern that has been hard to see in many years.

SpaceX IPO and geopolitics are the biggest drivers

Behind this burst of explosive growth are two core catalysts. First is the “largest IPO ever” being carried out by SpaceX, the space exploration giant led by Musk. This capital feast not only brought hefty direct underwriting fees and subsequent debt-financing opportunities for lead banks such as Goldman Sachs and Morgan Stanley, but also created a large stream of “soft dollars” revenue—meaning investment banks allocate popular IPO shares to hedge funds, in exchange for high additional commissions and trading flow.

Second, geopolitical turmoil has also become a profit hotspot for the trading division. Recent dramatic volatility in international crude oil prices, interest rates, and FX markets caused by the Iran war has significantly boosted trading volumes in equities and fixed-income products. Wall Street traders precisely captured the trading upside from volatility brought by uncertainty in Q2.

AI drives commercial lending recovery, consumer credit remains solid

On the real-economy front, companies seem to have treated geopolitical and macro “uncertainty” as the new normal and have started to restart their investment plans. In particular, thanks to the massive spending by AI-related companies on infrastructure and equipment, demand for commercial loans is showing a clear rebound. The report notes that, amid intense competition with private credit markets, traditional banks are gradually regaining ground—especially benefiting regional banks such as Fifth Third.

In addition, even though the market has worried that high interest rates would crush consumers, with the U.S. continuing to maintain low unemployment, consumer delinquency rates—including mortgage, auto loans, and credit cards—are still staying at healthy low levels, providing solid support for banks’ consumer finance businesses.

Regulatory easing is a positive, the market focuses on forward outlook

On a more macro policy level, the Deregulation policies actively pushed by the Trump administration after taking office have also created a highly favorable operating environment for the banking industry, helping U.S. financial stocks outperform the broader market for two consecutive years.

That said, analysts also remind that despite the strong performance in Q2 that has essentially become market consensus, the banking industry still faces potential risks. Whether private credit could see default “bombs,” and whether competition between banks for deposits could intensify, may drive up interest expense costs and compress net interest margin (NIM). Therefore, the real highlight of this week’s earnings reports will hinge on whether each CEO’s operating outlook for H2 2026 and 2027 can sustain the same optimistic tone.