Bank of America shares suffered their steepest decline in more than a year Monday after Chief Executive Brian Moynihan warned that two businesses that powered the bank’s recent earnings growth are losing momentum.
The stock fell 5.1% to $59.47 after Moynihan said third-quarter sales and trading revenue would be roughly flat from a year earlier, ending — or at least interrupting — a 17-quarter run of year-over-year growth. He also expects investment-banking fees to decline by at least 10%.
Bank of America expects investment-banking revenue of roughly $1.6 billion to $1.8 billion for the quarter, down from about $2 billion a year ago. Sales and trading revenue is expected to remain near the $5.4 billion generated during the third quarter of 2025.
Neither forecast points to a collapse in business. The sharper market reaction reflects how much investors had come to expect from Bank of America’s markets businesses after an exceptionally strong first half.
The stock entered Monday near $62.69 and had traded as high as $65.23 during the past year. More than 64 million shares changed hands Monday, roughly twice its recent average daily volume.
The concern is that one of Bank of America’s strongest earnings engines is shifting from rapid growth to little or no growth just as expectations for the company have risen.
A Strong Second Quarter Raised the Bar
Bank of America’s second quarter showed why the word “flat” attracted so much attention.
Sales and trading revenue jumped 33% from a year earlier to $7.1 billion, marking the bank’s 17th consecutive quarter of year-over-year growth. Equities revenue surged 70% to $3.6 billion, while fixed-income, currencies and commodities revenue increased 9% to $3.5 billion.
Investment banking was also unusually strong. Companywide fees reached $2.1 billion, up 50% from the previous year as debt underwriting, advisory work and equity issuance all improved. Bank of America reported $9.1 billion of second-quarter net income and $1.21 of earnings per share, up 34% year over year. Revenue rose 15% to $31.6 billion.
Monday’s guidance does not erase those gains. It suggests the pace is normalizing.
Moynihan said the broader investment-banking market is down roughly 10% during the third quarter, but Bank of America could perform somewhat worse because it had smaller positions in some areas where deal activity was strongest.
That makes the investment-banking slowdown partly an industry issue and partly a question of Bank of America’s mix of business.
The trading outlook is more notable because of the bank’s long growth streak. Moynihan described a flat year-over-year quarter as still being one of Bank of America’s stronger third quarters historically, but investors had grown accustomed to consistent increases.
Other major bank stocks also declined Monday, though less sharply. Citigroup fell about 1.9%, JPMorgan Chase lost 1.7% and Goldman Sachs dropped 3.9%, while the broader S&P 500 banking index declined 2.7%.
The Rest of the Bank Still Looks Healthy
Moynihan did not signal a broader deterioration in Bank of America’s business.
He said the deal pipeline remains full, consumers continue spending and credit quality is about as strong as it has been in a long time. Bank of America also entered the quarter with growing loans and deposits: second-quarter average loans and leases increased 8% from a year earlier to $1.22 trillion, while average deposits exceeded $2 trillion.
The larger risk is whether higher interest rates begin reducing financing and deal activity.
Moynihan said additional rate increases could slow demand for financing, an increasingly relevant concern with markets expecting the Federal Reserve to tighten policy again this week. That could affect underwriting and mergers activity even if the underlying economy remains healthy.
For Bank of America shareholders, Monday’s selloff therefore looks less like a warning about credit losses or a weakening consumer and more like a reset in expectations for businesses that had been growing unusually fast.
The next confirmation comes October 14, when Bank of America is scheduled to report third-quarter earnings.
Investors will be watching whether trading revenue actually breaks its 17-quarter growth streak, where investment-banking fees land within Moynihan’s $1.6 billion to $1.8 billion range, and whether strength in net interest income, consumer banking and credit quality is enough to offset slower Wall Street revenue.
After Monday’s 5% decline, Bank of America no longer needs another record quarter to surprise investors. But it will need to show that the slowdown in trading and dealmaking is a normalization from exceptional results rather than the beginning of a broader earnings deceleration.