Wall Street’s biggest banks are expected to post another strong quarter as record-breaking capital markets activity, led by SpaceX’s blockbuster initial public offering, fuels a surge in investment banking fees and trading revenue.

The second-quarter earnings season, which begins next week, is expected to highlight how the rebound in mergers, acquisitions and equity capital markets has become a major driver of profitability for the largest U.S. lenders, complementing steady growth in lending and interest income.

Five of the six largest U.S. banks, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs, are scheduled to report second-quarter results on July 14, while Morgan Stanley will release its earnings a day later on July 15.

Analysts expect investment banks with the strongest capital markets franchises, particularly Goldman Sachs and Morgan Stanley, to emerge among the biggest winners after playing leading advisory and underwriting roles in SpaceX’s nearly $86 billion initial public offering.

The landmark listing became one of the largest IPOs ever completed and served as a powerful signal that companies are once again willing to tap public markets after several years of subdued activity.

According to Reuters and other published reports, banks involved in the SpaceX offering collectively earned about $500 million in underwriting and advisory fees, providing a substantial boost to second-quarter earnings.

The transaction also boosted the recovery in equity capital markets, which has accelerated alongside improving investor confidence and strong demand for new stock offerings.

Morningstar analyst Sean Dunlop said Wall Street firms with sizeable equities businesses, particularly Goldman Sachs and Morgan Stanley, are likely to outperform peers because of their prominent roles in major capital markets transactions.

Even so, he cautioned that trading revenue may not match the exceptionally strong performance recorded during the first quarter.

Earlier this year, the outbreak of war involving Iran triggered sharp swings across global financial markets, sending investors scrambling to reposition portfolios amid rapidly changing expectations for inflation, oil prices and interest rates. That elevated volatility generated unusually high trading volumes across equities, bonds, commodities, and currencies, creating exceptionally favorable conditions for investment banks.

Although market activity remained healthy during the second quarter, analysts expect it to moderate from those extraordinary first-quarter levels.

Beyond trading, investment banking has emerged as one of the industry’s strongest growth engines. Corporate confidence has improved significantly in recent months, encouraging companies to pursue acquisitions, raise capital, and complete strategic transactions.

According to Dealogic, global investment banking revenue reached $61.4 billion during the first half of 2026, representing a 24% increase from the same period last year.

JPMorgan retained its position as the world’s leading investment bank by revenue, while Goldman Sachs continued to dominate the mergers and acquisitions advisory business.

The resurgence in dealmaking extends well beyond the SpaceX listing.

Among the quarter’s other notable transactions were chip designer Cerebras’ $6.4 billion initial public offering and Alphabet’s $85 billion share sale, both of which generated significant advisory and underwriting fees for participating banks.

The breadth of activity suggests the recovery is no longer dependent on a handful of transactions but is becoming more widespread across equity offerings, corporate financing and strategic acquisitions.

Commercial banking operations are also expected to contribute positively to earnings.

Analysts say stronger loan demand and improving net interest margins should provide additional support as banks continue benefiting from higher interest rates.

Net interest margin, one of the industry’s most closely watched profitability measures, reflects the difference between what banks earn from loans and investments and what they pay customers on deposits. Recent data from the U.S. Federal Reserve indicates that loan growth accelerated during the second quarter, particularly in commercial and industrial lending as businesses increased borrowing to finance expansion and investment.

Jefferies analyst David Chiaverini said corporate customers are gradually becoming more comfortable with the current economic environment.

“While some uncertainty persists from geopolitical factors and market volatility, many banks are reporting that clients are increasingly viewing the current environment as the ‘new normal’ and continuing to move forward with investment plans,” he said.

Even with those encouraging trends, investors remain focused on several important questions heading into earnings season. Executives’ outlooks for loan demand during the second half of the year will receive close scrutiny, particularly as consumers continue to face elevated living costs and inflationary pressures.

Morningstar analyst Austin Taggart said investors should pay particular attention to credit quality and broader lending trends.

Healthy loan demand and stable credit performance remain essential if the recent rally in bank shares is to continue through the remainder of 2026.

The earnings reports will also provide an opportunity for investors to assess how bank executives view the broader U.S. economy after months of geopolitical tensions, volatile financial markets and changing expectations for monetary policy.

Several bank leaders have already offered optimistic signals.

JPMorgan Chase Chief Executive Officer Jamie Dimon said in May that the bank expected investment banking fees to increase by at least 10% during the second quarter, reflecting sustained strength in corporate advisory activity.

At Bank of America, Co-President Jim DeMare indicated in June that the bank could outperform its earlier projection of 15% growth in markets revenue, supported largely by continued strength in equities trading.

Citigroup also expects another solid quarter.

Chief Financial Officer Gonzalo Luchetti said in June that trading revenue should increase by between high-single-digit and low-double-digit percentages, while investment banking revenue is projected to rise by a mid-teen percentage.

Wells Fargo expects higher interest income to support its results.

Chief Financial Officer Mike Santomassimo said in June that the bank’s net interest income should “step up” during the second quarter, reflecting stronger lending activity and improved profitability from its balance sheet.

Goldman Sachs enters earnings season after another milestone in its advisory business.

The bank said it had advised on more than $1 trillion worth of announced mergers and acquisitions during the first half of 2026, citing Dealogic data. The figure represents the fastest pace ever achieved by an investment bank over a six-month period and reinforces Goldman Sachs’ position as one of the dominant players in global corporate finance.

Morgan Stanley also expects favorable conditions to continue.

Chief Executive Officer Ted Pick said last month that it was “a pretty good time” to be in the capital markets business, pointing to healthy levels of core investment banking activity across the industry.

Together, the outlook suggests Wall Street’s largest banks are entering the second-quarter reporting season with momentum across multiple businesses. Record equity offerings, robust merger activity, resilient trading operations, stronger commercial lending, and expanding net interest margins are all expected to support earnings.

Prediction market traders remain skeptical that the U.S. government will acquire an ownership stake in OpenAI this year, even after reports that the artificial intelligence company proposed handing the Trump administration a 5% equity interest as part of a broader strategy to strengthen ties with Washington.

According to data from prediction market platform Kalshi, traders assign less than a 30% probability that the U.S. government will acquire a stake in either OpenAI or rival AI developer Anthropic before the end of the year, suggesting investors remain unconvinced that negotiations will result in a deal anytime soon.

The market’s cautious outlook comes days after the Financial Times reported that OpenAI had proposed granting the federal government a 5% stake in the company. At OpenAI’s latest valuation of approximately $852 billion, such a holding would be worth more than $42 billion, making it one of the largest government equity positions ever contemplated in a private technology company.

Kalshi’s event contract asks traders to predict which companies the U.S. government will take an ownership stake in before year-end. The market settles only after confirmation through official government announcements, regulatory filings or verified news reports.

Despite widespread discussion surrounding OpenAI’s proposal, traders continue to assign relatively low odds to any agreement materializing this year. The market reflects growing recognition that discussions about government ownership of strategic technology companies remain politically and legally complex, particularly when they involve firms at the center of the global artificial intelligence race.

Proposal Dates Back To 2025

The reported proposal is not new. According to a source familiar with the discussions cited by CNBC last month, OpenAI Chief Executive Sam Altman first raised the possibility of giving the U.S. government an equity stake during discussions with the Trump administration in early 2025.

The reported proposal formed part of a broader concept under which the federal government could hold minority ownership interests in leading American AI companies through a sovereign investment vehicle, allowing the public to share in the financial gains generated by advances in artificial intelligence.

Supporters believe such a structure would align public and private interests while ensuring taxpayers benefit from technologies expected to reshape the global economy.

President Donald Trump declined to directly address the reported OpenAI discussions when questioned by CNBC last week. Instead, he pointed to the administration’s previous investment in semiconductor manufacturer Intel, highlighting it as an example of government intervention to support strategically important industries.

“Intel came in. They had a problem,” Trump said. “I said, ‘I can solve your problem, but I want 10% of the company.'”

The administration acquired a 10% stake in Intel following an $8.9 billion government investment announced last year as part of broader efforts to strengthen domestic semiconductor manufacturing.

Trump has previously argued that government ownership stakes in critical technology companies allow Americans to become “partners” in industries that will define future economic growth.

Quantum Companies Seen As More Likely

While traders remain cautious on OpenAI, Kalshi participants see a significantly greater likelihood that the government will acquire stakes in companies operating in other strategic technologies.

The strongest expectations center on the quantum computing industry. Traders currently assign probabilities exceeding 60% that the government could take ownership stakes this year in Rigetti Computing, D-Wave Quantum, and semiconductor manufacturer GlobalFoundries.

Those expectations are supported by policy announcements made earlier this year. In May, the U.S. Commerce Department announced plans to award approximately $2 billion in grants to nine quantum technology companies.

The National Institute of Standards and Technology (NIST) subsequently indicated it intends to acquire minority, non-controlling equity stakes in participating companies, including Rigetti Computing, D-Wave Quantum, and GlobalFoundries.

Unlike the reported OpenAI proposal, those investments already have publicly announced government backing, explaining why prediction market traders assign much higher probabilities to their completion.

Drone Manufacturers Also Attract Attention

Prediction markets also suggest moderate expectations that the government could acquire stakes in defense technology companies. The Wall Street Journal reported in May that the Trump administration had explored investment arrangements with drone manufacturers, including Performance Drone Works and Neros Technologies, with some proposals reportedly involving government equity ownership.

Kalshi traders currently assign slightly above a 50% probability that the government will acquire a stake in Performance Drone Works before year-end.

The implied probability for Neros Technologies remains below 40%, indicating greater uncertainty over whether negotiations will result in an investment.

The growing number of prediction contracts indicates that the federal government is more willing to take direct financial interests in strategically important industries. Rather than relying solely on grants, subsidies and tax incentives, policymakers have shown greater willingness to pursue equity investments in sectors considered critical to national security, including semiconductors, quantum computing, artificial intelligence and advanced defense technologies.

If OpenAI’s proposal were eventually accepted, it would represent one of the most significant government investments in a private technology company and could establish a new model for public participation in America’s rapidly expanding AI industry.