Bank of America shares fell 5 percent Monday after chief executive Brian Moynihan told analysts that third-quarter investment banking fees would drop more than 10 percent from a year earlier, a sharp reversal from the 50 percent surge the bank posted in the second quarter. Trading revenue is expected to be roughly flat year-over-year, compared with a 33 percent jump in the prior period.
The numbers behind the guidance
Moynihan cited Dealogic data showing the overall investment banking market down about 10 percent. He said the bank is not as well positioned in the segments seeing the most activity, so its own decline will likely exceed the industry average. The second quarter had delivered a blockbuster 50 percent fee increase and a 33 percent trading revenue gain, making the third-quarter outlook a notable deceleration.
Pipeline strength versus headline weakness
The chief executive also noted a robust deal pipeline, especially in middle-market advisory work. That underlying strength contrasts with the double-digit fee decline now projected for the current quarter, leaving investors to weigh near-term revenue pressure against a backlog that could support future periods.
What the move signals for Wall Street
The muted forecast from the second-largest U.S. bank by assets arrives after a stretch of AI-fueled capital markets exuberance. Whether the slowdown proves transitory or marks the end of the recent boom will depend on how quickly that pipeline converts into booked fees in the quarters ahead.