JPMorgan profit beats estimates on trading boom, shares hit by weaker investment banking

By Manya Saini and Saeed Azhar

Jan 13 (Reuters) – JPMorgan Chase’s profit exceeded analysts’ estimates in the fourth quarter as its traders cashed in on volatile markets, but its shares fell on Tuesday as investment banking revenue missed market expectations.

Shares fell 2.8% in early trading, also pressured by concerns over the Trump administration’s proposed move to cap credit card interest rates, which the bank said could hurt the industry and consumers.

JPMorgan’s trading business benefited from markets swinging sharply in the last three months of 2025 as concerns about a bubble in AI stocks intensified after two years of broad gains, while investors also speculated on the path of U.S. interest rates.

“The U.S. economy has remained resilient,” CEO Jamie Dimon said in a statement. “These conditions could persist for some time, particularly with ongoing fiscal stimulus, the benefits of deregulation and the Fed’s recent monetary policy.”

Markets revenue at JPMorgan climbed 17% in the fourth quarter, as equity surged 40%, driven by higher revenue across products, particularly in Prime. Fixed income climbed 7%. 

The prime brokerage business on Wall Street has benefited from surging valuations of companies across sectors. 

Bond markets also remained jittery as uncertainty persisted around when and how much the U.S. Federal Reserve would cut rates. 

The bank’s shares were last down about 2.8% in volatile trading. The stock surged 34% in 2025, outperforming the broader equity markets. 

“I wouldn’t expect a whole lot out of JPM stock today, as the stock is coming off a great year where the bar for perfection is set pretty high,” said David Wagner, head of equities and portfolio manager at Aptus Capital Advisors, which holds shares of the bank. 

“Today’s strong results reflect that the bar can be met, but a lot is currently priced into the stock.”

The largest U.S. bank earned $5.23 per share in the quarter ended Dec. 31, on an adjusted basis, beating Wall Street expectations of $5, according to estimates compiled by LSEG.

JPMorgan recorded a $2.2 billion provision in the reported quarter tied to its agreement with Goldman Sachs to take over a credit card partnership with Apple. 

Executives also weighed in on recent moves by the Trump administration. Dimon voiced support for an independent Federal Reserve in a call with reporters days after the administration opened a criminal investigation into the central bank’s Chair Jerome Powell.

SPOTLIGHT ON DEALMAKING 

JPMorgan’s investment banking fees fell 5% in the quarter, easing from a bumper prior year when a surge in deal activity helped lift the bank to its highest-ever annual profit.

JPMorgan’s investment banking fees missed Wall Street estimates by 8% and the bank’s own forecast that it will grow at a single digit percentage in the fourth quarter, UBS analysts said in a note.

Bankers are optimistic that a pickup in dealmaking will continue through 2026, driven by record-high equity markets and expectations of interest rate cuts.

“Investment banking was a bit disappointing but expect forward commentary to be more constructive, while average loan growth accelerating bodes well for the lending side,” said Stephen Biggar, an analyst at Argus Research. 

The U.S. IPO market reached its highest level in 2025 since the 2021 peak, in terms of both deal volume and funds raised.

JPMorgan worked on several high-profile transactions during the quarter, including advising Warner Bros Discovery on the $82.7 billion deal for its studio and streaming assets with Netflix and Kimberly-Clark on its $48.7 billion acquisition of Kenvue.

It was also a lead underwriter on medical supplies giant Medline’s IPO, the largest listing globally in 2025.

JPMorgan extended its run as the world’s top investment bank, earning the highest fees for the year, according to data from Dealogic.

INTEREST INCOME IN FOCUS 

Net interest income – the difference between what a bank earns as payments on loans and gives out on deposits – rose 7% in the fourth quarter to $25.1 billion. 

While lower rates can dent interest income, they can also encourage borrowing. The bank expects 2026 interest income, excluding markets, of about $95 billion. 

“Consumers and small businesses remain resilient,” Chief Financial Officer Jeremy Barnum told reporters on a call, adding that the bank was not seeing deterioration across income groups.

Large lenders, including JPMorgan Chase and Bank of America, provide a gauge of the U.S. economy, shedding light on consumer spending, borrowing and business activity.

“The consumer is stable, the labor market is a little softer than it was a year ago but there has not been a substantial rise in delinquencies for either loans or credit cards,” Brian Mulberry, senior client portfolio manager at Zacks Investment Management, which holds shares in the bank.

“That keeps solid growth in view over the next several quarters.”

Rivals are set to report results later this week, giving investors a broader view into the health of the economy. 

CREDIT CARD EXPANSION

The bank’s deal with Goldman to issue Apple’s card is expected to strengthen JPMorgan’s foothold in credit cards and add to a long list of strategic wins for Dimon, who has turned the bank into a leading player across retail and investment banking.      

The deal comes at a critical juncture for the credit card industry, which could face a sharp shift if a proposal by U.S. President Donald Trump to cap interest rates at 10% moves forward. While Trump has said he expects companies to comply by January 20, Wall Street analysts remain doubtful the measure can be implemented without congressional approval.

“If it were to happen, it would be very bad for consumers, very bad for the economy,” Barnum told reporters, adding that the bank would have to change the business significantly and cut back.

A banking industry body warned last week that the move could tighten access to credit for consumers and small businesses and drive borrowers toward unregulated lenders.

(Reporting by Manya Saini in Bengaluru and Saeed Azhar in New York; additional reporting by Michelle Price, editing by Lananh Nguyen, Sriraj Kalluvila and Nick Zieminski)