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“While there have been some signs of a softening, particularly in job growth, the U.S. economy generally remained resilient,” CEO Jamie Dimon said in a statement.
“However, there continues to be a heightened degree of uncertainty stemming from complex geopolitical conditions, tariffs and trade uncertainty, elevated asset prices and the risk of sticky inflation,” he added.
Overall, the U.S. consumer remains healthy, and the bank was not witnessing signs of stress, Chief Financial Officer Jeremy Barnum said.
“Consumers and small businesses remain resilient based on our data, and while we are closely watching the potentially softening 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% year-to-date as of Monday. “It was another classic, strong quarter from the bank, and the expectation is set high. Sometimes we see this with JPMorgan stock that, despite everything, there’s not quite enough to drive a positive earnings day stock reaction,” said Matt Stucky, chief portfolio manager for equities 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 expenses could rise about 4% next year, might be weighing on the stock.
MARKETS REVENUE JUMPS
The bank’s traders capitalized on portfolio repositioning by their clients as equity markets hit record levels during the quarter. Revenue from the markets division, which includes both equities and fixed-income trading, rose 25% to $8.9 billion to a third-quarter record, far surpassing an earlier estimate.
“The quarter showcased the strength of JPMorgan’s diversified business model, with all major segments contributing to growth. We think this will lead the momentum for the rest 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” in its commercial and investment bank, as well as a loss related to a single client in its asset and wealth management unit. The bank said it has exposure to bankrupt auto dealer Tricolor, and it took a $170 million loss in the third quarter related to the situation.
Referring to Tricolor, Dimon said this was “not our finest moment,” and said the bank was looking at all risk and control frameworks.
He also warned that similar situations with other borrowers could arise. “When you see one cockroach, there are probably more.”
NII BOOST
Large banks such as JPMorgan and Bank of America can check the pulse of the U.S. economy by offering insights into consumer spending, borrowing, and business activity.
Net interest income, the difference between what banks earn on loans and pay on deposits, continues to prop up industry earnings. JPMorgan revised its NII forecast for the year higher to roughly $95.8 billion, compared with an earlier estimate of $95.5 billion. It had also raised its forecast in July.
“As a traditional bank, NII is a core earnings engine,” said Brian Mulberry, senior client portfolio manager at Zacks Investment Management, which holds the bank’s shares. “The fact that JPMorgan has raised its NII guidance indicates confidence in its interest-earning asset performance.”
It expects interest income, excluding markets, of $95 billion in 2026, driven by balance sheet growth and partially offset by the impact of lower rates.
WALL STREET OPERATIONS SHINE
Corporate dealmaking has picked up this year as companies take advantage of a booming stock market.
Investment banking fees at JPMorgan rose 16% in the third quarter. Trading revenue also soared at a time when economic uncertainty remains.
“There is a lot of stuff in the queue (on initial public offerings) and ready to go, and now conditions are much more favorable in terms of equity market valuations,” Barnum said, adding that merger and acquisition activity has also risen.
“It was the busiest summer we have had in a long time in terms of announced M&A activity, and we’re seeing that play through,” he added.
JPMorgan has collected the most investment banking fees among its rivals this year, according to analytics firm Dealogic.
Revenue from equities business jumped 33% to $3.3 billion in the third quarter, while that from fixed income surged 21% to $5.6 billion, largely driven by higher revenue in rates, credit and the securitized products.
Uncertainty about interest rates and the U.S. government shutdown could reignite market volatility, benefiting Wall Street trading. JPMorgan reported a profit of $5.07 per share for the latest quarter, comfortably beating analysts’ estimates of $4.84 per share.
Rival Wells Fargo and Goldman Sachs also beat Wall Street estimates for third-quarter profit on Tuesday.
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