Evercore said third-quarter capital markets indicators are tracking below expectations, with the firm anticipating investment banking and trading guidance from banks to come in below consensus estimates.
In its August 2026 Capital Markets Monthly report, Evercore said investment banking volumes declined 6% year over year in July as lower debt capital markets activity offset increases in equity capital markets and mergers and acquisitions.
Debt capital markets and syndicated lending activity fell 18% from a year earlier. By comparison, equity capital markets volumes increased 119%, while M&A activity rose 11%.
Trading indicators improved following a slower July, according to the report. Most fixed income, currencies and commodities measures were running at low- to high-double-digit year-over-year growth rates on a quarter-to-date basis.
Within FICC, foreign exchange trading volumes increased 17% year over year, commodities rose 17%, credit gained 10% and rates activity increased 2%.
Equities indicators were mixed. CBOE volumes declined 4% year over year, while retail activity increased 43% and options activity rose 14%.
Margin balances remained relatively stable despite some deleveraging associated with artificial intelligence-related positions during July. Average quarter-to-date margin balances were 32% higher than a year earlier.
Evercore said quarter-to-date performance indicators are running below expectations, suggesting third-quarter earnings-per-share estimates across the Street may be above the levels implied by current activity.
The firm expects banks’ investment banking and trading guidance to fall below consensus forecasts. Commentary relating to wealth management and trust fees is expected to either meet or come in slightly below expectations.
Evercore said investors appear to have accounted for some of the slower quarterly activity, with bank shares and valuation multiples adjusting alongside weaker data and higher interest rates and oil prices.
Across broader markets, equities increased 3%, while fixed income markets were unchanged month over month. Average H.8 loan balances increased 6% year over year, with average deposit balances also rising 6%.