Bond Trading Slumped in Q3 2026 While Stocks Carried Big Banks
Bond-trading revenue fell at large US banks in the third quarter of 2026. Swings in interest rates kept many investors trading less.
Four large banks posted weaker-than-expected revenue from client bond trading after bond-market turbulence, based on earnings reported in the week of Oct. 13, 2026 Wall Street Journal. Client bond trading means buying and selling bonds for clients for a fee. The misses were in rates and spread products, which cover government bonds and credit. Trading was stop-start. Clients took less risk.
Morgan Stanley's revenue from fixed income, currencies and commodities, called FICC, fell 7% from a year earlier Reuters. FICC includes rates, credit, foreign exchange and commodities, in cash and in derivatives, which are contracts linked to prices.
Bank of America reported sales and trading revenue of $5.1 billion, down 5% from a year earlier Reuters. Weak fixed-income trading contrasted with record quarterly equities trading revenue. Equities means stocks.
Goldman Sachs also reported an unexpected fall in bond-trading revenue. The bank had been expected to lead Wall Street in stock-trading revenue for the quarter Bloomberg.
JPMorgan was the partial exception. Its markets revenue rose 15% from a year earlier Reuters. Equity markets revenue jumped 49% from a year earlier. Strength came almost entirely from equities.
Across the group, stock desks did better than bond desks Bloomberg. The largest banks were expected to report almost $19 billion in combined stock-trading revenue for the quarter Bloomberg. For the first nine months, equities units at five of the largest US banks were on track for more than $66 billion in revenue Bloomberg.
In October 2026, JPMorgan raised its annual interest income forecast to about $106.2 billion including markets activity and $97.2 billion excluding markets Reuters. Net interest income is the gap between what a bank earns on loans and what it pays on deposits. The excluding-markets number strips out trading-linked interest and shows core lending more clearly.
The biggest banks entered the second half of 2026 after one of their most profitable six-month periods in at least a decade Yahoo Finance.
The broader context here is why bonds and stocks moved differently. When rate expectations swing, banks charge more to offer instant prices for bonds and many clients wait to change bond holdings. The fee per trade can rise, but the number of trades can fall by more, so total revenue falls. Stocks can stay busy from hedging and rebalancing, as investors adjust a mix of shares.
Looking at what this means for earnings, equities and net interest income offset soft bond trading in the quarter, notably at JPMorgan and Bank of America. Bond trading often recovers when rate expectations settle and new bond sales restart. If choppy rates and thin trading continue, bond desks would lean more on short-term volatility bets than steady client flow. For now the quarter points to low turnover rather than large trading losses.
