Bank of America Fee Outlook Sparks Sell-Off Across U.S. Banks

Major U.S. bank shares fell across the board after Bank of America CEO Brian Moynihan issued a weaker-than-expected third-quarter fee and trading outlook, signaling a cooling period for Wall Street dealmaking. The lower forecast triggered immediate declines across major financial institutions, differing from more optimistic guidance provided by competitors like Citigroup.

"We're not as well-positioned in some of the businesses that have more activity," said Brian Moynihan, Chief Executive Officer, Bank of America, at a Barclays conference, adding that the deal pipeline remains strong and "part of it is just getting the deals through the system."

Third-Quarter Fee Projections Miss Consensus

Underpinning the market reaction, Bank of America expects its third-quarter investment banking fees to range between $1.6 billion and $1.8 billion. That projection falls below Wall Street's consensus estimate of $2.04 billion, exposing a potential lag in capturing active market transactions.

The cautious forecast rippled quickly through major financial sector equities. Goldman Sachs shares fell 2.5%, Morgan Stanley declined 1.8%, JPMorgan Chase lost 1.4%, Citigroup slipped 0.5%, and Bank of America dropped 0.4%, while the S&P 500 Banks index decreased 0.7%, according to an Investing.com report.

Competitors Offer Diverging Perspectives

While Bank of America pointed to friction in moving deals through the pipeline, peer institutions reported varied momentum. Speaking at the same conference, Citigroup CFO Gonzalo Luchetti offered a more resilient outlook, stating that Citi's market revenue is tracking toward mid-single-digit growth and investment banking revenue toward low-single-digit growth, according to Yahoo Finance.

What the Outlook Means for Dealmaking

The split in executive commentary highlights how uneven the recovery in capital markets remains for traditional lenders. As institutions navigate regulatory hurdles and shifting corporate borrowing costs, fee generation continues to serve as a critical barometer for overall Wall Street health.