Bank of America, opens new tab beat estimates for first-quarter profit, as heightened market volatility pushed revenue from equities trading to a record and a rebound in mergers and acquisitions boosted investment banking fees.

Global equity markets entered 2026 on a bullish trajectory, buoyed by year-end momentum from interest rate cuts worldwide in late ‌2025 and robust corporate earnings, but the optimism soon evaporated.

A hawkish policy shift from the Federal Reserve, mounting fears of an artificial intelligence valuation bubble, and escalating U.S. involvement in Middle East tensions rattled the markets.

The volatility sparked an intensified market rotation, with investors fleeing high-growth tech shares in favor of defensive value sectors.

Volatile markets tend to benefit investment banks, as trading desks generate higher revenue from increased client activity.

Bank of America’s sales and trading revenue rose 13% to $6.4 ​billion in the first quarter, helped by record equities trading volumes.

“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, adding that “we remain watchful of evolving risks.”

Global megadeals remained on a strong footing in the first three months ⁠of 2026, despite turbulence in the Middle East and swings in company valuations. Transactions in the first quarter exceeded $1.2 trillion, data compiled by LSEG showed.

Big transactions – specifically big technology M&A – dominated, with 22 deals ​worth more than $10 billion each signed in the three months ended March 31, a quarterly record, the data showed.

Bank of America’s net profit ‌rose nearly ⁠17% to $8.6 billion, or $1.11 per share, in the three months ended March 31, compared with $7.4 billion, or 89 cents per share, a year earlier.

Analysts were expecting a per-share profit of $1.01, according to estimates compiled by LSEG.

Bank of America’s net interest income — the difference between what the bank earns on loans and pays out on deposits — rose 9% to $15.7 billion from a year ​earlier.

Earnings from big lenders such as JPMorgan Chase ​and Bank of America typically shed light on ⁠the health of the U.S. economy, reflecting shifts in consumer spending, borrowing and business activity.

U.S. banks have benefited from the repricing of fixed-rate assets and securities portfolios over time into higher-yielding assets.

The rate cuts announced in the second half of 2025 by the Federal Reserve helped banks reduce deposit costs and boost ​demand for loans, which led to relatively stable borrowing in the quarter, even amid macroeconomic pressures.