Morgan Stanley Traders Outperformed Goldman Sachs in a Record-Breaking Quarter

Morgan Stanley delivered standout results in the third quarter, outperforming Wall Street expectations as its equity traders posted exceptional gains. The bank’s stock-trading division thrived amid a volatile market environment influenced by U.S. President Donald Trump’s policies, which kept investors on edge and trading volumes elevated throughout the quarter.

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According to a statement released Wednesday, revenue from stock trading jumped 35% year-over-year to reach $4.12 billion, far exceeding analyst forecasts that had projected only a 6.6% increase.

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The results also outpaced Goldman Sachs Group Inc.’s $3.74 billion in equities trading revenue, signaling that Morgan Stanley is once again challenging its long-time rival for dominance in the business. Under Chief Executive Officer Ted Pick, the bank has been working to reclaim its position as the top equity-trading powerhouse on Wall Street.

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Beyond its trading success, Morgan Stanley also reported stronger-than-expected performance in other divisions. Investment banking fees surged 44%, boosted by a rebound in dealmaking activity and capital markets issuance.

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Meanwhile, the firm’s wealth-management arm a cornerstone of its business model continued to shine, pulling in $81 billion in new client assets and achieving a 30% pretax profit margin, surpassing revenue expectations.

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Investors rewarded the impressive results, with Morgan Stanley shares climbing 3.9% in early New York trading. The stock has already gained 24% year-to-date through Tuesday, reflecting growing confidence in the firm’s strategy and execution.

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The bank’s earnings report came after most major U.S. lenders had already released their third-quarter results. JPMorgan Chase & Co., Goldman Sachs, Citigroup Inc., and Wells Fargo & Co. all posted solid numbers earlier in the week, with particular strength in trading and investment banking.

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Still, many executives adopted a cautious tone about the broader economic outlook, tempering enthusiasm around the strong results. On Wednesday morning, Bank of America Corp. also posted better-than-expected earnings, citing a pickup in investment-banking revenue.

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For Morgan Stanley, this latest performance marks another milestone for its traders. After delivering their best-ever second quarter, the firm’s equity trading desk followed up with a record-breaking third quarter. Fixed-income trading also delivered steady gains, rising 8% from the prior year. Combined, total trading revenue climbed to $6.29 billion, comfortably beating Wall Street’s consensus estimate of $5.5 billion.

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The firm’s wealth-management business continued to demonstrate resilience and scale, generating $8.2 billion in revenue, topping forecasts and reaffirming its importance as a stable source of earnings, especially during periods of market turbulence.

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Adding to its momentum, Morgan Stanley recently secured a lower capital requirement from the Federal Reserve after appealing the central bank’s initial assessment. The favorable adjustment gives the firm more flexibility with its balance sheet and has sparked investor interest in how CEO Ted Pick plans to deploy the excess capital.

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His comments will be closely watched, particularly after Goldman Sachs announced earlier this week its acquisition of venture capital firm Industry Ventures, signaling continued competition for strategic growth opportunities.

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During a July update, Pick emphasized that while Morgan Stanley is open to potential acquisitions, it maintains a disciplined approach. “We’re looking at inorganic opportunities,” he said, “but the bar is super high.”

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Overall, Morgan Stanley’s third-quarter report reflects the firm’s ability to capitalize on volatile markets, drive growth across its core divisions, and strengthen its position among Wall Street’s elite. With record-breaking trading revenue, rising investment-banking fees, and steady wealth-management gains, the bank enters the final quarter of the year with solid momentum and a renewed sense of confidence in its leadership and strategy.

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