Goldman Sachs and Morgan Stanley Turn Bullish: Iran Tensions Can't Stop Market Recovery, Wall Street Awaits SpaceX and AI Unicorns to Kick Off IPO Supercycle

English Financial News APP has noticed that the largest Wall Street banks kicked off 2026 on a strong note. Despite the Iran war dampening IPO activity, revenues from equity capital markets (ECM) still achieved robust growth.

Data shows that Goldman Sachs (GS.US) and JPMorgan Chase (JPM.US) topped the rankings for first-quarter income generated from leading IPOs and equity offerings, with $535 million and $472 million respectively. Compared to the same period in 2025, all five major banks achieved double-digit percentage growth.

The surge in underwriting fees stemmed from overall healthy dealmaking in the first quarter, even though the market saw extreme fluctuations and volatility spikes due to the war between the US-Israel and Iran. Although the US IPO market slowed (March volume dropped to its lowest level in nearly a year), bank executives still predict a rebound is imminent.

Goldman Sachs CEO David Solomon said during the bank’s earnings call, “There is no doubt the Middle East conflict had an impact and slowed IPO activity, particularly in March,” “Ultimately, the equity market has shown extraordinary resilience. If that resilience persists, I think you’ll see IPO activity accelerate again.”

With growth in US equity capital markets, Goldman Sachs outperforms competitors

Convertible bonds dominated US ECM transactions this quarter, with Oracle issuing a $5 billion mandatory convertible bond and Nebius Group NV raising $4.3 billion from a dual bond issuance.

The company behind last year’s largest IPO—medical supplies giant Medline Inc.’s $7.2 billion debut—facilitated the largest share divestment in the US during the first three months of 2026, with some private equity backers selling $3.5 billion of shares. Additionally, Western Digital’s sale of shares in its former subsidiary SanDisk raised $3.2 billion.

By contrast, the IPO market drew more attention for setbacks, including LiftOff Mobile Inc. and Clear Street Group Inc., both of which postponed their listings in February due to escalating conflict in the Middle East.

Nevertheless, given that SpaceX reportedly plans what could be the largest IPO in history this year, and Anthropic and OpenAI are preparing multi-billion dollar IPOs, it’s easy to foresee banks settling substantial commission payments by year-end. With more companies preparing to go public beyond these three, executives expressed optimism.

Morgan Stanley CEO Ted Pick believes that if the market can regain momentum from the start of 2026, the pipeline for IPOs and M&A deals will become active once again, noting that private equity firms are strongly motivated to cash out their portfolios.

Pick stated, “I truly believe that in the current environment, not every company can successfully conduct an IPO,” “The market will be selective. What we’re seeing is that the largest asset managers and private equity firms—some of whom own very high-quality companies—are likely to act first.”

Citi (C.US) led its peers in equity underwriting revenue growth, increasing 64% year-on-year in the first quarter. CFO Gonzalo Luchetti said during the earnings call that the increase was driven by growth in follow-on offerings and convertible bond business.

US stock market and equity-related sales rebound

Currently, the Chicago Board Options Exchange Volatility Index (VIX) is hovering near 17, while the S&P 500’s one-month implied volatility has returned to pre-war levels. As traders drive share prices higher amid optimism for a US-Iran ceasefire, US benchmark stock indexes are poised to set their first closing record highs since January.