Wall Street banks see robust deal pipeline despite market volatility

Wall Street banks reported a robust deal pipeline despite ongoing market volatility. Despite rising bond yields and market turbulence, top banking executives expressed confidence in the environment for investment banking, with strategic discussions among corporations remaining active. JPMorgan's CFO, Jeremy Barnum, suggested that a brief market slowdown was expected as deals awaited optimal valuation terms.

Bank of America was the only major US bank to see a rise in investment banking fees. Citigroup's CEO, Jane Fraser, highlighted the US as the center of dealmaking activity, noting a pickup in Europe and Asia. The overall sentiment for dealmaking was deemed constructive by Fraser. Wall Street's investment banking sector has faced numerous challenges over the past year, but they have continued to navigate through them.

Goldman Sachs CEO, David Solomon, reported that companies were content with the regulatory environment for dealmaking, and they were not deterred by the midterms. Despite solid deal pipelines, analysts caution about near-term investment banking activity due to higher borrowing costs and valuation uncertainties. Global M&A volumes fell by 41% in the third quarter, falling below $1 trillion for the first time since 2025.

US IPO activity has also weakened, with high-profile companies postponing their public offerings due to valuation concerns. The IPO market's selectivity has increased, with biotech being one of the few sectors still attracting interest. The pipeline for equity market transactions is heavily dependent on follow-on investments, as the IPO market remains selective.