JPMorgan Chase raised its full-year forecast for net interest income on Tuesday, after strong performance in its trading and investment banking businesses helped it beat expectations for third-quarter profit.
Economic resilience despite tariff war risks and hopes of U.S. interest rate cuts have prompted companies to strike big deals and consider stock offerings, lifting investment banking business across Wall Street, with dealmakers expecting an even stronger 2026.
"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.
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"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.
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.
NII BOOST
Large banks such as JPMorgan Chase and Bank of America can help feel the pulse of the U.S. economy by offering insights into consumer spending, borrowing and business activity.
Net interest income, or the difference between what banks earn on loans and pay out on deposits, continues to prop up industry earnings.
JPMorgan revised its interest income forecast for the year. It now expects NII of roughly $95.8 billion for 2025, compared with an earlier estimate of $95.5 billion. It had raised its forecast in July as well.
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Analysts, on average, had expected $95.4 billion, according to estimates compiled by LSEG.
Industry executives have said consumers remain in good financial shape, helped by a strong labor market and rising wages. That has also meant regular debt payments and steady demand for new loans.
At JPMorgan, NII rose 2% in the third quarter to $24.1 billion. Meanwhile, for the fourth quarter, it expects its interest income to be $23.5 billion, excluding markets.
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.
It reported a profit of $5.07 per share for the latest quarter, comfortably beating analysts' estimates of $4.84 per share.
Rival Wells Fargo also beat Wall Street estimates for third-quarter profit on Tuesday.
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Corporate dealmaking has picked up sharply this year after a brief slowdown in April as corporates look to take advantage of a booming stock market.
Investment banking fees at JPMorgan rose 16% in the third quarter. Meanwhile, trading revenue also soared at a time when economic uncertainty remains.
JPMorgan collected the most investment banking fees among its rivals so far this year, according to analytics firm Dealogic.
Stocks hit all-time highs during the quarter, lifted by optimism around U.S. interest rate cuts and strong corporate earnings from top technology companies.
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.
Looking ahead, uncertainty about interest rates and the ongoing U.S. government shutdown could reignite market volatility, benefiting Wall Street trading desks.
As the government shutdown delays the release of key economic indicators, investors will focus on remarks from CEOs of major companies, including Dimon, for their insight on the economy.
Earlier this week, JPMorgan 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 pledge.
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The bank's overall revenue rose 9% to $47.1 billion in the quarter.
Shares of JPMorgan were little changed in volatile trading before the bell.
