Morgan Stanley said first-quarter profit rose as stronger deal activity and a surge in trading revenue bolstered results. The Wall Street firm reported higher investment banking fees alongside meaningful increases in both equity and fixed-income trading income, helping total revenue climb versus a year earlier.
Investment banking revenue increased 36% to $2.12 billion. Equity trading revenue grew 25% to $5.15 billion and fixed-income trading revenue rose 29% to $3.36 billion. Together these business lines contributed to total quarterly revenue of $20.6 billion, up from $17.7 billion in the prior-year period.
Net income for the three-month period was $5.6 billion, or $3.43 per share, compared with $4.3 billion, or $2.60 per share, a year earlier. Shares of the bank rose about 2% in premarket trading following the results.
Drivers of the quarter
The firm benefitted from a pick-up in advisory work on large transactions. Morgan Stanley was among the advisers to Unilever on the proposed merger of its food business with McCormick that, if completed, would create a combined global food company valued at about $65 billion.
At the same time, market turbulence tied to an escalating U.S.-Israeli conflict with Iran has pushed up oil prices and raised concerns that inflation could remain elevated for longer. That volatility has prompted investors to rebalance and increase hedging activity across assets, a pattern that typically lifts volumes and fees at trading desks.
Deal volumes worldwide have already reached $1.38 trillion in the most recent first quarter, based on Dealogic data, following a near-record 2025 when global mergers and acquisitions exceeded $4.81 trillion. Peers including Goldman Sachs, JPMorgan and Citigroup also reported sizable gains in investment banking revenue in the quarter.
New listings and selective IPO market
Heightened geopolitical tensions have unsettled equity markets and reduced risk appetite, which has weighed on the initial public offering market. Still, some companies - particularly those in the industrials and defense sectors - have continued to pursue public listings. Morgan Stanley is among the bookrunners on SpaceX’s potential IPO, where the company could raise as much as $75 billion at a possible $1.75 trillion valuation.
Bank executives have cautioned that the IPO market has become more selective amid economic uncertainty, but they expect issuance to pick up when conditions stabilize.
Takeaway
Overall, Morgan Stanley reported stronger revenue and higher profit driven by both advisory and market-making activities. The combination of sustained M&A volumes and recent market volatility supported the firm’s trading businesses, while the IPO pipeline remains constrained but not uniformly closed.