Bank of America saw its first-quarter earnings climb as market turbulence drove up trading activity and a wave of major corporate mergers increased the bank’s investment banking revenue.
The company’s stock gained 1.5% in pre-market trading following the earnings announcement.
Financial markets started 2026 with strong momentum, supported by late-2025 interest rate reductions and solid corporate performance. But that positive outlook quickly shifted as the Federal Reserve took a more aggressive stance, concerns grew about overvalued artificial intelligence companies, and increased U.S. involvement in Middle Eastern conflicts created market uncertainty.
This market instability led to significant shifts in investor behavior, with many moving away from high-growth technology stocks toward more stable value investments.
When markets experience volatility, investment banks typically see increased profits as their trading divisions earn more from heightened client transactions. Bank of America’s sales and trading division generated $6.4 billion in the first quarter, representing a 13% increase.
The first three months of 2026 witnessed substantial deal-making activity, with global transactions surpassing $1.2 trillion despite Middle Eastern conflicts and fluctuating company values.
Large-scale deals, particularly in the technology sector, dominated the landscape. According to LSEG data, 22 transactions valued at more than $10 billion each were completed during the quarter ending March 31, setting a new quarterly record.
BofA Securities played important advisory roles in several major transactions, including McCormick’s $42.7 billion purchase of Unilever’s food division and Boston Scientific’s $14.9 billion acquisition of medical device company Penumbra.
The bank also provided guidance for Devon Energy’s $26 billion acquisition of Coterra Energy, marking a significant step in U.S. shale industry consolidation.
Additionally, the bank headed the advisory team for senior housing REIT Janus Living’s March listing on the New York Stock Exchange.
Investment banking fees at BofA totaled $1.8 billion for the quarter, a 21% increase that exceeded the bank’s projected 10% growth.
JPMorgan Chase also announced strong first-quarter results on Tuesday, surpassing analyst expectations with help from robust trading and deal-making performance.
Despite strong earnings, JPMorgan, Bank of America, and Wells Fargo have all declined in 2026, trailing the broader S&P 500 index, which has gained approximately 1.8% through the most recent close.
Bank of America posted net income of $8.6 billion, equivalent to $1.11 per share, for the quarter ending March 31. This compared to $7.4 billion, or 89 cents per share, during the same period last year.
“We remain watchful of evolving risks. However, we saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy,” CEO Brian Moynihan said in a statement.
