Q3 Bank Earnings: Goldman Soars as JPMorgan Posts Rare Miss

A strong quarter that stocks didn't reward

The largest U.S. banks made a lot of money in the third quarter of 2026. The more useful story is where that money came from and what the executives who earned it chose to stress. JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup all reported on Tuesday, October 13. Each posted higher profit than a year earlier, and each also warned about higher interest rates and inflation that refuses to settle down.18 Bank of America and Morgan Stanley reported the next day. Together the six earned about $43.5 billion on roughly $165 billion of revenue.4

Investors were not impressed. One tally found that all six stocks fell on the day they reported, from a 0.2% dip at Goldman to a 5.6% drop at Citigroup.10 The early-trading picture was more mixed. Goldman jumped before the open and JPMorgan edged up at first, before closing prices told a cooler story.1512 Our reading is that the market had already priced in the good news on trading and lending, and the more cautious tone from management weighed more heavily.

JPMorgan's rare stumble

The biggest surprise came from the biggest bank. JPMorgan earned $15.3 billion, or $5.57 a share, up from $14.4 billion, or $5.07, a year earlier. Analysts had expected $5.93.1 Coverage widely described it as the bank's first earnings miss in nearly three years.35

Reports differ somewhat on why. The Associated Press blamed slower fixed income trading in the investment bank.1 Other analysis also pointed to expenses rising faster than revenue. Fixed income trading came in at $5.4 billion, about $550 million below the StreetAccount estimate, and total expenses of $27.3 billion were roughly $90 million above forecasts.2 A securities loss mattered too. JPMorgan recorded $658 million in net investment securities losses, which cut earnings by $0.18 a share. Without that item, profit would have been $15.8 billion, or $5.75 a share.9 One outlet compared that adjusted $5.75 with the consensus and still called it a miss, so the shortfall holds up either way.12 Revenue of $50.17 billion was also below the $51.23 billion forecast, ending a run of revenue beats.12

The core lending business was fine. Net interest income rose about 13% to roughly $27.1 billion, and average loans grew 10%.1418 Even in a quarter remembered as a miss, the basic business of borrowing short and lending long is still working well for JPMorgan.16

The most telling detail may be the buyback. JPMorgan bought back only $664 million of its own stock in the quarter. Jamie Dimon said the bank wants to put capital to work where returns look attractive.9 Bank of America, by contrast, repurchased $6.0 billion.16 Dimon also said that "large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface."9 Taken together, the smaller buyback and that warning look like a bank keeping cash on hand rather than one celebrating.

Goldman's equities quarter

Goldman Sachs had the opposite kind of day. It earned $5.29 billion, or $17.01 a share, up from $4.1 billion, or $12.25, a year earlier.1 Estimates of the consensus range from $12.86 to $13.09 a share depending on the data provider. On any of them, the beat was about 30% or more, the largest among the six banks.2510 Net revenue of $18.68 billion was up 23% and nearly $2 billion above the LSEG estimate.24

Equities did most of the work. Revenue from stock trading rose 72% to $6.44 billion, about $1.42 billion more than expected.2 Equity financing, which means lending to hedge funds against their stock positions, grew fastest of all, up 96%.4 Advisory revenue hit a record $1.65 billion, up 18%.2 Investment banking fees overall rose 21% to $3.22 billion.5

There are some cautions. Fixed income, currencies and commodities (FICC) revenue was roughly flat at $3.47 billion.1418 Coverage also noted that Goldman's pipeline of future deals got smaller even as it booked record advisory fees.2 Most of the higher costs came from the extra activity, including a 54% jump in transaction-based expenses.2 For now, that is the kind of cost growth investors can accept.

Citi's turnaround shows up in the numbers

Citigroup was the most convincing beat of the day, even though its stock fell the most. Profit rose 40% to $5.25 billion, or $2.85 a share, against a consensus near $2.65.312 Revenue grew 8% to $23.8 billion.4 CEO Jane Fraser said it was the bank's best third-quarter revenue in a decade.14

The growth came from several businesses. Services, the unit that handles transactions for multinational companies, rose 15% to $6.6 billion and earned $2.6 billion on its own. Wealth revenue also rose 15%, and its net income nearly doubled.4 U.S. consumer cards were the only flat segment.14 The 53% jump in earnings per share is flattered by a goodwill impairment in the prior-year quarter. Excluding that, growth was about 27%.7 Citi's return on tangible common equity, a key profitability measure, reached 11.5%. That is real progress, but it is still the lowest of the six banks.4 The 5.6% drop in the stock suggests investors had already priced in a good result. Citi had been the best performer of the four in 2026 before the report.56

Wells Fargo grows again

Wells Fargo's results were the least dramatic of the group, and in our view the most informative about the rest of the economy. The bank earned about $5.95 billion, or $1.87 a share, narrowly beating estimates.38 Revenue of $21.87 billion missed the $22.31 billion forecast, however.312 Net interest income rose 5% to $12.52 billion but also fell short of expectations. The bank cited lower returns on floating-rate assets, higher deposit costs and fewer non-interest-bearing deposits.3

The growth came from the balance sheet. Average loans and deposits each rose 11%, a pace Wells could not have reached while regulators capped the size of its assets.4 Regulators lifted that cap, which dated from the bank's sales-practices scandal, and profits have risen steadily since.1 One figure moved the wrong way. Provisions for credit losses rose to $1.03 billion from $681 million a year earlier, while actual charge-offs rose only about 3%.716 CEO Charlie Scharf struck an upbeat note, saying consumers are spending more and delinquencies remain low.10 Even so, building reserves faster than losses are rising suggests the bank is preparing for some deterioration in credit.

The rate backdrop

The interest-rate story is different from what investors were planning for a year ago. The Federal Reserve raised its target range by a quarter point to 3.75%–4% on September 16.14 Before earnings season, previews pointed to yields near 24-year highs and asked what that would mean for deposits and bond portfolios.6 Higher rates help lending income, as JPMorgan's 13% and Bank of America's 8% net interest income growth show.14 Bank of America estimates that a further one-point parallel rise in rates would add $1.4 billion to its net interest income over 12 months.15

But higher rates also cost something. They produce securities losses like JPMorgan's, push up deposit costs like those at Wells Fargo, and appear to have hurt bond trading.39 Bond trading fell 4% at JPMorgan, 7% at Morgan Stanley and 17% at Bank of America, and was flat at Goldman. Only Citi grew it, by 4%.16 One summary put it simply: bond trading weakened across Wall Street as rates jumped.10

Where the coverage agrees and where it splits

The coverage agrees on the main points. Stock trading drove the quarter, bond trading stalled, lending income stayed strong, and the industry's top executives are noticeably cautious.4716 It differs on how to judge the quarter. Some reports focused on near-record revenue and returns on tangible equity of 11.5% to 22.6%.4 Others asked how much of the profit would last if markets cool or borrowers struggle.7 Bank of America's $1.2 billion regulatory settlement charge, which pushed its profit down 17%, adds another caution about how clean these results are.11

We side with the skeptics. A quarter that depends on a 72% jump in stock trading at Goldman and 49% at JPMorgan is very sensitive to market conditions.4 The firmer foundations are lending income, wealth management and Citi's improving businesses. Rising rates help the first, while sticky inflation could hurt borrowers. The banks' own reserve building and JPMorgan's smaller buyback suggest they are planning for both possibilities.916