Being a Wall Street bank last year was fantastic. We'll find out how fantastic 2025 was in the upcoming week. In the next few days, the main banks in America will release their fourth quarter and yearly results. The largest bank in the country, JPMorgan Chase (JPM), will begin the process with its results on Tuesday morning.
It is anticipated that the company will report yet another year of record revenue and earnings. Results from Wells Fargo (WFC), Citigroup (C), and Bank of America (BAC) are anticipated to be released on Wednesday morning.
Investment banking giants Morgan Stanley (MS) and Goldman Sachs (GS) will release their reports on Thursday morning. Every company must demonstrate that yearly profits increased over the previous year. In 2025, shares of all six major banks beat the S&P 500 (^GSPC).
With the exception of Wells Fargo, analysts anticipate that all of the banks will report record yearly profits from trading fees. Its team of investment bankers, which is smaller but expanding, is expected to set its own record for dealmaking fees. "Everything is moving up at the same time, right now," stated Saul Martinez, an HSBC analyst covering major US banks.
"You've seen material increases in earnings and profitability power for these companies," Martinez added, citing everything from significant volatility spikes to a rising stock market and an improvement in lending.
The KBW Nasdaq Bank Index (^BKX), which contains many of the nation's largest banking stocks, outperforms the S&P 500 for the third year in a row in 2026, according to a number of equity analysts, including Ebrahim Poonawala of Bank of America. In 2025, the S&P 500 increased by 17%, while the BKX increased by 29%.
"In the late 1990s and early 2000s, banks beat the S&P 500 for three years in a row. In a recent letter to clients, Poonawala stated, "We see similarities to both." Today's earnings forecast for the sector "is best it has been post Great Financial Crisis," Poonawala continued.
Over the weekend, President Trump's proposal for major credit card lenders to cap interest rates by 10% for a year presented banks with their first challenge.
The action caused JPMorgan, Citigroup, and other major banking stocks to fall down on Monday, even though it is still unclear exactly how the President will implement the cap. However, analysts are concentrating on the industry's anticipated tailwinds for this year.
In 2026, the US economy is predicted to pick up speed, and bankers will have the most regulatory flexibility since the 2010 post-financial crisis reforms.
It is anticipated that lending will increase and that the industry will benefit from lower interest rates. M&A activity isn't anticipated to slow down in the interim.
"The way 2025 unfolded, it was a story of increasing momentum throughout the year since the market paused in April and March," stated Jay Hofmann, North American head of M&A at JPMorgan. "At the moment, there is no reason to believe that the economic factors underpinning this are going to reverse."
Given the potential productivity and efficiency gains from adding additional technology, like AI, and next generation assets, like cryptocurrency, to their digital platforms, there is even growing discussion that investors are starting to treat banking behemoths like technology businesses.
Tom Lee, president of Fundstrat Global Advisors, stated on CNBC in late December, "I think the large, tech forward banks are going to start to see margin expansion and trade more like tech stocks in the future."
Investors "could start to price in the potential before earnings benefits materialize," according to BofA's Poonawala, even if it's "too early" for these measures to significantly affect bank bottom lines this year.
Even if these companies have a number of fundamental advantages, the run higher has raised valuations and raised concerns about whether the stock boost they have experienced will last.
Big banks "aren't cheap, but we still like them," according to Chris McGratty, head of research at KBW. McGratty believes that these companies' earnings trend will endure in the absence of a market shock.
However, not everyone on the Street is as persuaded. In 2025, the average stock gain for JPMorgan, Bank of America, Citigroup, and Wells Fargo was forty percent.
Just one third of that success was due to better profits growth, according to calculations made by Wolfe Research analyst Steven Chubak.
This indicates that the remaining performance was due to multiple expansion, or the amount investors are paying for each dollar of earnings from these companies.
Chubak lowered JPMorgan and Bank of America's stock because he anticipated mediocre profitability in 2026. In a note to clients dated January 7, Chubak stated, "It's all just a little too perfect in Bank land."
