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, also posted strong earnings, signaling a highly active and competitive financial sector heading into 2026.
What's behind the headline?
Goldman Sachs and Wall Street's 2026 Outlook
Goldman Sachs's record $9.3 billion in investment banking fees for 2025 underscores a robust M&A environment, fueled by deregulation and political shifts favoring corporate consolidation. The bank's strategic retreat from consumer banking, including the sale of its Apple Card portfolio, highlights a focus on core financial services.
The broader industry, including Morgan Stanley and Citi, is experiencing a surge in deal-making, with M&A volumes up 42% to $5.1 trillion in 2025. This momentum is driven by regulatory easing, Fed rate cuts, and abundant corporate cash reserves, creating a fertile environment for mergers and acquisitions.
However, the outlook is not without risks. Industry leaders warn of potential economic and geopolitical headwinds, such as market volatility and credit quality concerns. The emphasis on talent retention and competitive bonuses indicates a fierce battle for top dealmakers.
Overall, the financial sector is poised for a highly active 2026, with record deal pipelines and increased revenues. Yet, caution remains, as economic uncertainties could temper growth. The industry’s focus on strategic deals and talent will shape its trajectory in the coming months.
What the papers say
The articles from Business Insider UK, NY Post, and AP News collectively highlight Wall Street's optimistic outlook for 2026, driven by record revenues and deal activity. Business Insider UK emphasizes Goldman Sachs's strategic focus and market comeback, while the NY Post details record investment banking fees and industry-wide growth. AP News corroborates the earnings surge and the sector's reliance on deregulation and technological interest. Contrasting opinions are minimal, but some caution about economic headwinds is evident in industry warnings, balancing the overall optimistic tone.
How we got here
The recent financial surge follows a period of regulatory easing and increased deal activity, with Goldman Sachs and other major banks benefiting from a record year for M&A, driven by favorable economic policies and a high volume of corporate transactions. Goldman’s strategic focus on investment banking and exit from consumer banking reflect shifting priorities amid market growth.
Go deeper
More on these topics
-
The Goldman Sachs Group, Inc., is an American multinational investment bank and financial services company headquartered in New York City.
-
JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City.
-
Morgan Stanley is an American multinational investment bank and financial services company headquartered at 1585 Broadway in the Morgan Stanley Building, Midtown Manhattan, New York City.
-
Citigroup Inc. or Citi is an American multinational investment bank and financial services corporation headquartered in New York City.
-
The Bank of America Corporation is an American multinational investment bank and financial services company headquartered in Charlotte, with central hubs in New York City, London, Hong Kong, Dallas, and Toronto.
-
Jane Fraser may refer to:
Jane Frazier (1735−1815), or Fraser, pioneer from Virginia who was captured by Indians and escaped
Jane Fraser, pen-name of Rosamunde Pilcher (1924−2019)
Jane Fraser (born 1942), president of the Stuttering Foundation of Ame
-
David Solomon may refer to:
David Solomon (artist) (born 1976), American artist and painter
David Solomon (TV producer), American television director and producer
David Solomon (writer), Australian educator, scholar and writer
David Solomon, sperm donor.