Key Points
JPMorgan reports Tuesday before the bell, with Wall Street expecting about $5.94 a share on roughly $52 billion in revenue, up 17% from a year ago.
JPMorgan guided to mid-to-high-teens growth in investment banking fees and markets revenue. Bank of America warned its investment banking fees will fall more than 10%.
JPMorgan closed Friday at $332.99, up 0.5%, and it is down about 6% over the past month while the S&P 500 has gained.
Wednesday's CPI report is expected to show headline inflation rising to about 3.6%, the last inflation reading before the Fed's Oct. 27-28 meeting.
Earnings season starts Tuesday. And the first question it has to answer is one the banks themselves can't agree on.
In September, the two biggest banks in America gave investors opposite answers about Wall Street's dealmaking business. JPMorgan said its investment banking fees and markets revenue would grow by a mid-to-high-teens percentage in the third quarter. Around the same time, Bank of America CEO Brian Moynihan said his bank's investment banking fees would likely fall more than 10% from a year earlier.
"What we're seeing is the market generally in investment banking is down 10%," Moynihan said. Bank of America shares fell 5.1% that day, their worst drop since April 2025.
Both can't be describing the same market. On Tuesday, we start finding out who read it correctly.
What JPMorgan Has to Show
Analysts expect JPMorgan to earn about $5.94 a share on $52.2 billion in revenue, according to Zacks. That would be a 17% jump in earnings from a year ago. Investment banking fees are expected to reach about $3.04 billion, up from $2.61 billion.
The bar is high. In the second quarter, JPMorgan earned $7.70 a share on $57.35 billion in revenue, crushing estimates of $5.55 and $50.61 billion. Markets revenue jumped 35% to a record $12.1 billion. But management warned that some of that activity was pulled forward by large IPOs and unusual market events.
After the second quarter, JPMorgan raised its full-year net interest income outlook to about $105.5 billion and its expense forecast to about $107.5 billion. Investors will want to know if both still hold.
The disagreement matters because JPMorgan's stock has lagged. Shares rose 0.5% to $332.99 on Friday, but they are down about 6% over the past month and up only about 2% to 3% this year, while the S&P 500 has gained. If JPMorgan delivers the growth it promised, that gap could close quickly. If it doesn't, the second quarter will look like the peak.
The Rate Problem
Higher rates usually help banks earn more on loans. This time, they come with a catch.
Global bond yields are near multi-year highs. The 10-year Treasury yield ended Friday at about 5.24%, the 2-year at 4.79% and the 30-year at 5.60%. Saxo notes that "a couple of high-profile IPOs" have been shelved or delayed in recent months as yields spiked, and the investment banking fees that drove the second quarter depend on those deals.
Investors will also be watching how banks handle the drop in bond values on their balance sheets, and whether loan losses are creeping up. JPMorgan lowered its card charge-off forecast to about 3.2% after the second quarter. Any reversal would be a warning about the consumer.
There's also private credit. As we wrote this week, two lines have formed on Wall Street as some private funds limit withdrawals. Banks lend heavily to that industry, and analysts will press executives on their exposure.
The Rest of the Banks
Tuesday: Goldman Sachs is expected to earn $13.07 a share on $16.84 billion in revenue, according to MarketBeat. It has beaten estimates eight quarters in a row. Citigroup is expected at $2.65 a share. Wells Fargo also reports. Bank stocks rallied into the reports Friday. Goldman rose 1.4% to $895.32, Citigroup gained 1.2% to $129.64, Wells Fargo climbed 1.9% to $83.55, and Bank of America added 1.3% to $54.32.
Wednesday: Bank of America and Morgan Stanley report. Bank of America has guided to $1.6 billion to $1.8 billion in investment banking fees, down from about $2 billion a year ago.
Overall, earnings at the largest banks are expected to rise about 20% from last year, according to Reuters.
CPI: The Number the Fed Is Waiting For
On Wednesday at 8:30 a.m. ET, the Labor Department releases September's consumer price index. The Cleveland Fed's nowcast puts headline inflation at 3.6% from a year earlier, up from 3.4% in August, while core inflation is expected to hold near 2.4%. Gasoline prices drove most of the expected increase.
The Fed raised rates to a 3.75% to 4% range in September. Fed Governor Christopher Waller said Thursday he expects more hikes, but added that they "do not need to come at consecutive meetings." Futures on Friday priced only about a 21% chance of a hike on Oct. 28.
A cooler core reading could let the Fed wait until December. A hot one could bring a hike this month. With the economy adding just 29,000 jobs in September and the midterms three weeks away, the stakes are high.
Where Markets Stand
Stocks head into the week on firmer footing. On Friday, the S&P 500 rose 0.6% to 7,811.54, the Dow gained 423 points, or 0.8%, to 51,654.95, and the Nasdaq added 0.6% to 27,366.17. The VIX, Wall Street's fear gauge, fell to 14.84.
Oil ended Friday roughly flat, with U.S. crude near $91.50 a barrel and Brent near $104.25, recovering from early losses after President Trump ruling out an attack on Iran before the midterms. Hurricane Isaias has shut in about 63% of Gulf of Mexico oil production.
What Lands Next
Monday: Stock markets are open for Columbus Day.
Wednesday: ASML reports, along with BlackRock and Progressive.
Thursday: Taiwan Semiconductor reports. September retail sales and producer prices are also due.
Oct. 27-28: The Fed meets.
JPMorgan says business is booming. Bank of America says it's shrinking. By Wednesday morning, investors will know which bank read the market right.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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