What's happened
Goldman Sachs reports a record $9.3 billion in investment banking fees for 2025, driven by a booming M&A market and deregulation. Major US banks, including Morgan Stanley and Citi, posted strong earnings, signaling a highly active and competitive financial sector heading into 2026. The industry anticipates a very constructive year ahead.
What's behind the headline?
Goldman Sachs and Wall Street's 2026 Outlook
Goldman Sachs' record $9.3 billion in investment banking fees for 2025 underscores a robust M&A environment, driven by deregulation and political shifts favoring corporate consolidation. The bank's success, along with Morgan Stanley and Citi's strong earnings, signals a broader industry rebound after years of uncertainty.
The narrative of a 'comeback' is reinforced by the industry’s focus on digitization and deal-making, with Goldman’s strategic emphasis on M&A and capital markets activity. The recent relinquishment of its Apple Card partnership indicates a retreat from consumer banking, but the core investment banking and advisory services are thriving.
The industry’s optimism is further supported by a projected 45% increase in global M&A volume for 2025, and forecasts of continued growth in 2026. However, this bullish outlook is tempered by potential geopolitical risks and economic uncertainties, such as the ongoing US government shutdown and fluctuating tariffs.
Overall, Wall Street is poised for a highly active year, with record deal pipelines and competitive hiring, but caution remains due to macroeconomic and geopolitical factors that could disrupt the momentum. The sector's focus on strategic mergers and technological investments will likely shape its trajectory through 2026 and beyond.
What the papers say
The Wall Street Journal highlights Goldman Sachs' record $9.3 billion in fees and the industry's overall strong performance, emphasizing deregulation and deal activity as key drivers. Business Insider UK notes the industry’s competitive environment and optimistic forecasts for 2026, with a focus on deal pipelines and hiring pressures. AP News reports on the earnings growth of Goldman Sachs and Morgan Stanley, attributing success to deregulation policies and investor interest in AI and tech sectors. Contrasting perspectives include The Wall Street Journal's emphasis on regulatory concerns and potential risks, while Business Insider UK and AP News highlight the sector's resilience and growth prospects, painting a picture of a highly active and optimistic financial landscape heading into 2026.
How we got here
The financial sector's recent performance is rooted in deregulation policies from the Trump administration, which spurred deal activity. Goldman Sachs led the charge with record fees, supported by a surge in global M&A volumes and increased investor interest in technology and corporate mergers. The sector's optimism is also reflected in the strong earnings reports from major banks like Morgan Stanley, Citi, and JPMorgan, amid a backdrop of regulatory easing and favorable macroeconomic conditions.
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