UPDATE 1-Morgan Stanley profit jumps on investment banking revival

Morgan Stanley's profit rose in the third quarter as its investment bankers rode a resurgence in dealmaking.

Shares of the bank rose 2.1% in premarket trading on Wednesday. A string of large deals pushed global mergers and acquisitions activity past the $3 trillion mark this year. A resilient U.S. economy, optimism around interest-rate cuts and lighter regulations under the Trump administration have spurred businesses to do deals or tap capital markets.

With markets hovering near record highs and the U.S. Federal Reserve resuming its rate-cutting cycle in September, bankers are optimistic that the momentum will continue through fourth quarter and into 2026. Morgan Stanley's investment banking revenue rose to $2.11 billion in the quarter, compared with $1.46 billion a year earlier.

Total revenue was a record $18.2 billion in the quarter. Wall Street rivals, including JPMorgan Chase and Goldman Sachs, also benefited from a surge in M&A and initial public offerings (IPOs).

The bank posted a net income of $4.6 billion, or $2.80 per share, for the three months ended September 30, it said on Wednesday. That compares with $3.2 billion, or $1.88 per share, a year ago.