Bank of America's earnings beat expectations
JPMorgan Chase reported a surge in third-quarter earnings, driven by multibillion-dollar deals and initial public offerings that boosted its investment bank's performance, along with a significant improvement in trading results.
The largest U.S. bank announced on Tuesday that its profits rose to $14.39 billion, or $5.07 per share, for the three months ending September 30, compared to $12.9 billion, or $4.37 per share, in the same period last year, according to Reuters.
"Despite some signs of slowdown, particularly in job growth, the U.S. economy has generally maintained its resilience," CEO Jamie Dimon said in a statement. He added that uncertainty is heightened by complex geopolitical conditions, tariffs, trade uncertainty, rising asset prices, and the risk of persistent inflation.
Dealmaking activity has rebounded sharply this year after a brief slowdown in April, buoyed by a resilient economy and hopes for interest rate cuts, sending stocks to record highs. Investment banking fees rose 16 percent in the third quarter, while trading revenues also saw significant increases despite ongoing economic uncertainty.
US banks open the season
The renewed confidence has boosted investment banking fees on Wall Street, with dealmakers anticipating a stronger environment in 2026 as the Federal Reserve continues to cut interest rates. JPMorgan has generated the highest investment banking fees among its competitors so far this year, according to analytics firm Dealogic.
Earlier this week, the bank announced plans to hire bankers and invest up to $10 billion in U.S. companies critical to national security and economic resilience, as part of a broader $1.5 trillion commitment.
Executives emphasized that consumers remain in good financial shape, supported by a strong labor market and rising wages, which contributed to regular debt repayments and continued demand for new loans. JPMorgan's net interest income rose 2 percent to $24.1 billion in the third quarter.
Major banks, such as JPMorgan Chase and Bank of America, are an important window into the US economy, providing indicators of consumer spending and borrowing, as well as business activity. With the release of key economic indicators delayed due to the government shutdown, investors will focus on Dimon's remarks for a clearer view of the economy.
The bank's shares stabilized in pre-market trading after the results were announced.
Wells Fargo Raises Profitability Targets
Wells Fargo's third-quarter earnings beat Wall Street estimates on Tuesday, and the bank raised its closely watched profitability target after regulators removed its asset cap, paving the way for continued growth.
The US Federal Reserve raised the bank's $1.95 trillion asset ceiling for seven years in June, a significant step in its post-scandal recovery, allowing it to accelerate CEO Charlie Scharf's efforts to boost growth.
Shares of the San Francisco, California-based bank rose 3 percent in premarket trading. The bank is now targeting a return on tangible common equity of 17 to 18 percent, up from its previous target of 15 percent.
Wall Street had expected Wells Fargo to raise its target after the bank lifted a ceiling that had limited its asset growth. Net interest income, the difference between what the bank earns from loans and what it pays out on deposits, rose 2 percent to $11.95 billion in the third quarter, compared to the previous year.
“While some economic uncertainty remains, the U.S. economy has been resilient, and our clients’ financial health remains strong,” Scharf said in a statement.
Citigroup stock rose
The Federal Reserve's interest rate cut in September is expected to boost banks' interest income starting in the fourth quarter. US banks benefited from these cuts, which reduced deposit costs—the interest paid to customers for holding their savings.
The fourth-largest U.S. lender reported net income of $5.59 billion, or $1.66 per share, in the three months ending September 30, compared to $5.11 billion, or $1.42 per share, in the same period a year earlier.
Analysts had expected Wells Fargo to earn $1.55 per share, according to estimates compiled by the London Stock Exchange Group.
Goldman Sachs profits jump 37%
Goldman Sachs' quarterly profits rose more than 37 percent on Tuesday, driven by higher advisory fees for investment bankers and traders taking advantage of active markets.
The company's expectations of a strong year for dealmaking were met, as companies resumed their merger and listing plans.
Investment banking fees rose to $2.66 billion for the quarter ending September 30, compared to $1.87 billion in the same period last year.
This growth was driven by a 60 percent increase in advisory fees, along with higher underwriting fees for debt and equity. Its competitor, JPMorgan Chase, also announced strong investment banking results earlier today.
Shares saw a slight increase in premarket trading following the results announcement. Global mergers and acquisitions (M&A) volume during the first nine months of the year exceeded $3.43 trillion, with nearly 48 percent of that occurring in the United States, according to Dealogic data.
The period also recorded the highest average merger and acquisition volume globally and in the United States since 2015, in line with CEO David Solomon's expectations, which he outlined at last year's Reuters Next conference.
Goldman was among the co-managers of major IPOs during the quarter, including design software company Figma, Swedish fintech company Klarna, and space technology company Firefly Aerospace.
Total quarterly profit rose to $4.1 billion, or $12.25 per share, compared to $2.99 billion, or $8.40 per share, a year earlier.
Goldman executives have grown increasingly optimistic about deals in recent months, with Solomon stating in September that the firm had one of its busiest weeks for IPOs in more than four years.
Sustainable trading flexibility
Wall Street trading platforms reaped the benefits of record volatility as clients repositioned their investment portfolios to accommodate changes in President Donald Trump's trade, foreign, and fiscal policies.
However, the third quarter was one of Wall Street's quietest in nearly six years, as interest rate cuts by the Federal Reserve and strong investment in artificial intelligence pushed major US stock indexes to record highs.
Goldman Sachs' equity trading revenue rose 7 percent to $3.74 billion as investors took on more risk, while fixed income, currencies, and commodities revenue reached $3.47 billion, a 17 percent increase over the previous year