Bank of America Slides on Soft Third-Quarter Investment Banking Guidance

Bank of America shares fell more than 5% after chief executive Brian Moynihan guided third-quarter investment banking fees to a range of $1.6 billion to $1.8 billion and signaled that trading revenue would be roughly flat. The comments came at an industry conference and landed in a market already positioned defensively ahead of this week's Federal Reserve decision.

The guidance reflects a slower deal environment rather than credit deterioration. Higher financing costs have pushed some sponsors to delay transactions, and flat trading revenue points to subdued client activity across rates and equities rather than any single desk underperforming.

Not everyone read the move as justified. Morgan Stanley kept an overweight rating and described the selloff as overdone, expecting a rebound in the fourth quarter as pipeline activity converts. With the 10-year Treasury yield near 5%, the offsetting question for the bank is how much net interest income benefit arrives alongside the fee-income slowdown.