New York, Jan 16, 2026, 06:04 EST — Premarket
- Morgan Stanley shares climbed 5.8% in premarket trading following a stronger-than-expected quarterly profit
- Investment banking revenue surged 47% thanks to a boost in deal fees and underwriting
- Investors are set to digest more bank earnings on Friday, with a busier schedule of reports lined up for next week
Morgan Stanley shares jumped 5.8% to $191.23 in U.S. premarket trading Friday, fueled by stronger-than-expected fourth-quarter profits. The Wall Street bank saw a boost from a surge in dealmaking fees.
The report arrives early in earnings season, as investors assess whether the surge in mergers and stock-and-bond issuance can hold up. For major banks, the key question is straightforward: are clients genuinely ramping up spending, or is this just a short-lived spike before rates and political issues take a toll.
Morgan Stanley reported earnings of $2.68 per share, beating estimates of $2.44, driven by a 47% jump in investment banking revenue to $2.41 billion. The gains were fueled by strong debt underwriting and mergers advisory. The bank also hit a record annual revenue of $70.65 billion and noted that wealth management wrapped the quarter with $9.3 trillion in client assets, inching closer to its $10 trillion target.
Investment banking revenue comes from advising on mergers and guiding companies through stock sales or bond issuances. Morgan Stanley CFO Sharon Yeshaya told Reuters, “We are seeing an accelerating pipeline in M&A and IPOs,” highlighting increased deal flow in healthcare and industrials. Dealmakers are banking on that as global M&A surpassed $5.1 trillion in 2025, with Dealogic data revealing global investment banking revenues topped $100 billion. Reuters
Goldman Sachs signaled a more optimistic outlook for dealmaking following its quarterly results. CEO David Solomon told analysts the environment for 2026 appears “incredibly constructive” for M&A and capital markets. Stephen Biggar, a banking analyst at Argus Research, described the bank’s dividend hike as “a powerful testament” to management’s confidence in stronger earnings. Reuters
That said, any rebound in deals could quickly stall if markets seize up. A fresh selloff, rising funding costs, or a geopolitical jolt might shove IPOs and buyouts back into the pipeline—where they often linger.
Friday brings earnings from lenders and custodians like PNC Financial, State Street, M&T Bank, and Regions Financial, with investors watching closely for insights into credit demand and fee trends.
The next major hurdle arrives after the long weekend: U.S. markets will be shut Monday for the Martin Luther King Jr. holiday. Earnings season heats up next week, with Netflix, Johnson & Johnson, and Intel all set to report.
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