“While there are some signs of a weakening, especially in job growth, the U.S. economy remained resilient overall,” CEO Jamie Dimon said in a statement.
“However, a heightened level of uncertainty remains due to complex geopolitical conditions, tariffs and trade uncertainty, high asset prices and the risk of persistent inflation,” he added.
Overall, the US consumer remains healthy and the bank witnessed no signs of stress, Chief Financial Officer Jeremy Barnum said.
“Consumers and small businesses remain resilient based on our data, and while we are closely monitoring the potentially weakening labor market, our credit metrics, including early-stage delinquencies, remain stable and slightly better than expected,” Barnum told reporters.
JPMorgan shares pared early losses and were last down 1.7% in late morning trading. The stock was up 28% this year as of Monday. “It was another classic strong quarter for the bank and expectations are high. Sometimes we see with JPMorgan stock that, despite everything, there isn’t enough to drive a positive stock reaction on earnings day,” said Matt Stucky, chief equity portfolio manager at Northwestern Mutual Wealth Management. Mac Sykes, portfolio manager at Gabelli Funds, said the bank’s suggestion, in response to an analyst’s question, that costs could rise by about 4% next year could weigh on the shares.
MARKETS INCOME JUMPS
The bank’s traders benefited from their clients’ portfolio repositioning as equity markets reached record levels during the quarter. Revenue from the markets division, which includes both equity and fixed income trading, rose 25% to $8.9 billion, a record for the third quarter, easily beating a previous estimate.
“This quarter demonstrated the strength of JPMorgan’s diversified business model, with all major segments contributing to growth. We believe this will be the momentum for the remainder of 2025 and into 2026,” Kenneth Leon, director of equity research at CFRA Research, wrote in a note.
JPMorgan also noted losses related to “borrower-related irregularities” at its commercial and investment bank, as well as a loss related to a single client in its wealth management unit. The bank said it has exposure to bankrupt auto dealer Tricolor, and suffered a $170 million loss in the third quarter as a result of the situation.
Referring to Tricolor, Dimon said this was “not our best moment”, saying the bank was looking at all risk and control frameworks.
He also warned that similar situations could arise with other borrowers. “If you see one cockroach, there are probably more.”
So step up
Major banks like JPMorgan and Bank of America can track the pulse of the U.S. economy by providing insight into consumer spending, lending and business activity.
Net interest income, the difference between what banks earn on loans and pay on deposits, continues to support the sector’s profits. JPMorgan raised its NII forecast for the year to about $95.8 billion, up from a previous estimate of $95.5 billion. In July, the country had also raised its forecast.
“As a traditional bank, NII is a key earnings driver,” said Brian Mulberry, senior client portfolio manager at Zacks Investment Management, which owns the bank’s stock. “The fact that JPMorgan has raised its NII guidance signals confidence in the performance of its interest-bearing assets.”
It expects interest income, excluding markets, of $95 billion in 2026, driven by balance sheet growth and partially offset by the impact of lower interest rates.
WALL STREET ACTIVITIES SHINE
Corporate dealmaking has increased this year as companies benefit from a booming stock market.
Investment banking costs at JPMorgan rose 16% in the third quarter. Trading revenues also soared at a time when economic uncertainty remains.
“There’s a lot of stuff in the queue (for IPOs) and ready to go, and now conditions are much more favorable in terms of equity market valuations,” Barnum said, adding that M&A activity has also increased.
“It was the busiest summer we’ve had in a long time in terms of announced mergers and acquisitions, and we see that carrying through,” he added.
JPMorgan has collected the most investment banking fees among its rivals this year, according to analytics firm Dealogic.
Equities revenues rose 33% to $3.3 billion in the third quarter, while fixed income revenues rose 21% to $5.6 billion, largely driven by higher revenues from interest rates, loans and the securitized products.
Uncertainty over interest rates and the US government shutdown could reignite market volatility, which would benefit trading on Wall Street. JPMorgan reported earnings of $5.07 per share for the latest quarter, easily beating analysts’ expectations of $4.84 per share.
Rival Wells Fargo and Goldman Sachs also beat Wall Street estimates for third-quarter earnings on Tuesday.
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