NEW YORK (AP) — Wall Street had one of its most profitable quarters in history, if the earnings released Tuesday by the nation’s four largest banks are to be believed. Companies are closing deals one after another, stock prices are skyrocketing, and world economy It has remained resilient despite tariffs and geopolitical upheaval.
Despite strong earnings at JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs & Co., bank executives expressed varying degrees of caution about the market and the economy, including concerns that asset prices in some markets were overly inflated.
“The U.S. economy generally remained resilient, with some signs of softening, particularly in job growth,” Jamie Dimon, chairman and CEO of JPMorgan Chase & Co., said in prepared remarks.
“However, the level of uncertainty continues to rise due to the complex geopolitical situation. customs duty Trade Uncertainty, Asset Price Increases, and Uncertainty Risks inflation” he added.
JPMorgan Chase & Co. reported profit of $14.39 billion, or $5.07 per share, an increase of 12% from the same period last year. Other large banks performed similarly or better. Wells Fargo earned $5.59 billion in the quarter, up 9% from the same period a year ago.
Citigroup’s third-quarter profit rose 16% to $3.75 billion, while Goldman Sachs posted a 37% increase in profit to $4.1 billion.
JPMorgan’s consumer banking division had a particularly strong quarter, led by its credit card business. The bank is seeing that consumers want to spend more, borrow more and keep their card balances for longer periods of time. The bank also upgraded its Chase Sapphire Reserve card this summer. Refresh by major credit card companies This is to allow customers to continue using their bank’s high-fee cards.
Other banks, including Wells Fargo, also reported strong consumer spending, with credit and debit card use increasing across all demographics. Citigroup also saw strong card spending. No banks added significant amounts to their loan loss reserves during the quarter.
With consumers appearing to be holding on, Wall Street is having one of its best years on record for deal making. Initial public offerings (IPOs) are back, and several major companies will go public this year. especially silicon valley artificial intelligence Companies have raised tens of billions of dollars in cash to fuel data center expansion. Private equity is also doing well, most notably a $55 billion takeover bid for a video game giant. electronic arts It was announced last month.
At Goldman Sachs, investment banking revenue rose 42% to $2.66 billion and fee income rose 27%, driven by a series of M&A deals in which Goldman bankers advised companies. Citigroup and JPMorgan also saw strong increases in investment banking and corporate lending revenue.
But despite the stock market rally and deals being struck, executives seem cautious about how long Wall Street’s party will last. Prices of assets from flight to safety gold and silver The United States and China remain in a high-stakes trade war, with basic goods such as steel, soybeans, and rare earths at the center of a geopolitical trade war. There has also been a significant rise in the stock prices of companies related to artificial intelligence.
“Obviously there’s still a lot of uncertainty around tariffs, inflation and the impact that will have on the labor market,” Citigroup Chief Financial Officer Mark Mason said on a call with reporters. Mr. Mason later described some markets as “frothy.”
Dimon expressed similar concerns on a call with reporters.
Asked to expand on his prepared remarks about soaring asset prices, he said: “There are a lot of assets that look like they’re entering bubble territory.”
With the U.S. government still shut down and economic data delayed or unavailable, investors are turning to big banks as agents of the broader economy. Additionally, banks have historically been at the forefront of corporate earnings season.
Investors will receive results on Wednesday from Bank of America, the nation’s second-largest bank by assets, and Morgan Stanley, a major investment bank. American Express, the credit card giant and a direct competitor to JPMorgan Chase & Co. and Citigroup Inc., will report its results on Friday.
