Major US banks are poised for a strong second-quarter earnings season, with JPMorgan, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley all expected to report increased profits compared to the previous year. This positive outlook is fueled by several tailwinds, including healthy loan growth, accelerating consumer spending, and significant activity in capital markets. The Bank of America Institute reported a 6.3% year-over-year jump in card spending in June, the strongest growth in over four years, largely driven by discretionary purchases. Customer accounts also showed improving wage growth and softer unemployment payments among lower-income customers. Despite some investor skepticism, analysts believe the fundamental backdrop for banks is good, with some suggesting a multiyear AI-driven "capital markets supercycle" could be underway.
A key driver of the expected strong performance is a surge in trading and investment banking. Analysts are forecasting the second-best trading quarter for these banks this decade, following a record first quarter. This strength is partly attributed to blockbuster mega AI deals and the SpaceX IPO, which generated a $500 million windfall for participating banks. OpenAI and Anthropic are also anticipated to go public later this year, further boosting capital markets activity. Global investment banking revenue reached $61.4 billion in the first half of 2026, a 24% increase from the prior year, with JPMorgan leading in overall investment banking revenue and Goldman Sachs dominating M&A advisory.
Individual bank estimates highlight this strong performance. JPMorgan is projected to earn $5.70 per share, up from $5.24 last year. Bank of America is expected to report $1.11 per share, compared to $0.89. Citigroup is forecasted to hit $2.68 per share, significantly up from $1.96. Wells Fargo is anticipated to post $1.71 per share, an increase from $1.60. Goldman Sachs and Morgan Stanley are also expected to show strong growth, with Goldman Sachs at $13.91 per share (up from $10.91) and Morgan Stanley at $2.84 per share (up from $2.13). These figures reflect LSEG estimates as of June 30. Many banks also announced stock buybacks and dividends after passing their annual Federal Reserve stress tests, contributing to record stock prices for Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, and JPMorgan.
Despite the positive outlook, some cautionary notes exist. JPMorgan CEO Jamie Dimon noted in May that his bank might be "overearning" and that the positive trend could "end in a nanosecond." While the overall credit picture remains "benign," concerns persist about potential risks such as a flatter yield curve impacting net interest margins, sluggish M&A activity, and banks' exposure to private credit funds. However, for now, the economic outlook appears sound, with Bank of America CEO Brian Moynihan stating that the US consumer remains strong, indicative of a robust underlying economy.
