Investment banking at Morgan Stanley did not recover as quickly as it did for rivals such as Goldman Sachs, Citigroup (NYSE: C ) and JPMorgan Chase (NYSE: JPM ). The other lenders also reported trading windfalls in the second quarter. Morgan Stanley's revenue fell 5%, and fewer completed M&A transactions weighed on its advisory revenue. But executives were more optimistic about the outlook for M&A and IPOs. "We are optimistic about the capital markets rebound," Chief Financial Officer Sharon Yeshaya told Reuters in an interview. "Companies are looking past tariffs for strategic movements and growth," she said, adding that discussions about mergers and divestitures are active again. Morgan Stanley's equity underwriting surged 42% to $500 million, driven by higher follow-on and convertible deals as well as IPOs. It was the lead underwriter of fintech giant Chime's June IPO and also led IPOs for Hinge Health, and marketing tech firm MNTN in May.