Morgan Stanley (MS) has reported a 9% decline in its third-quarter profits compared to the same period last year, a reflection of the challenges facing Wall Street as investment banking and trading revenues saw a decrease, sparking disappointment among investors and causing the firm’s stock to plummet by approximately 7% in a single day, marking its most substantial one-day decline in over three years.

Over the past three months, the stock has slumped by 13%, surpassing the declines experienced by other major banks in the industry.

The third-quarter earnings results of Morgan Stanley placed it near the bottom of the list when compared to its peer big banks.

While its profit dip was less severe than the significant 33% decline observed at rival Goldman Sachs (GS), it fell behind the profit surges reported by JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C).

One of the most prominent areas of concern was the substantial 27% drop in investment banking revenues compared to the previous year, positioning Morgan Stanley as the lowest performer among major banks with significant Wall Street operations.

In contrast, investment banking fees at Goldman Sachs, Bank of America, and Citigroup exhibited growth compared to the previous year. JPMorgan, although seeing a decrease in fees, reported a lesser decline of 2.6% for the same period.

Furthermore, Morgan Stanley’s revenue stemming from trading stocks and bonds also saw a decline of 4%. Despite this, the wealth and investment management units posted higher year-over-year profits. However, these profits fell short of what analysts had expected.

James Gorman, CEO of Morgan Stanley, commented on the performance, noting that although the market environment remained mixed during the quarter, the firm managed to deliver robust results. Gorman previously announced plans to step down as CEO “at some point in the next 12 months.”

Looking ahead, Gorman expressed optimism about the potential for increased activity in 2024. He pointed out that at present, boards of directors are cautious, as they are seeking a clearer understanding of financing costs before making significant decisions regarding capital transactions, highlighting the ongoing uncertainties in the financial landscape. This caution may be a key factor impacting the performance of financial institutions like Morgan Stanley and their strategies in the coming months.