Why big bank earnings this week matter for your money

America’s biggest banks open the third-quarter earnings season on Tuesday, October 13. Their results will offer one of the clearest early readings on how households and businesses are coping with 24-year-high bond yields, a Federal Reserve that is raising rates again, and a cooling job market.

Key takeaways

JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo report on October 13; Bank of America and Morgan Stanley follow on October 14.
Analysts expect profits at the largest banks to rise by up to 20% from a year earlier, yet the KBW Bank Index has fallen 13% from its August peak as yields climbed.
The numbers to watch are deposit costs, loan losses and dealmaking: together they show whether higher rates are starting to squeeze consumers and companies.

Why everyone is talking about it

Bank results are traditionally the starting gun of earnings season, and this quarter they arrive at an unusually tense moment. The S&P 500 ended Friday close to record territory, but the 10-year Treasury yield is hovering around 5.25% after touching its highest level since 2002 earlier this month. Investors want to know whether the economy can keep absorbing borrowing costs that are the highest in a generation, and banks see that from every angle: they lend to consumers, finance companies, hold bonds and take deposits.

The season has already had a rocky start outside banking. Delta Air Lines missed analysts’ estimates last week and cut its 2026 outlook, citing roughly $6 billion in extra fuel costs this year as oil prices stay elevated.

The facts so far

Schedule: JPMorgan, Goldman Sachs, Citigroup and Wells Fargo on Tuesday; Bank of America and Morgan Stanley on Wednesday. JPMorgan confirmed its date in an investor-relations notice.
Profit expectations: According to Reuters, third-quarter earnings at the largest banks are expected to rise by up to 20% year on year. LSEG consensus data cited by Reuters puts JPMorgan at $5.94 per share, against $5.07 a year earlier.
Mixed guidance: JPMorgan has said investment-banking fees and trading revenue should rise by a “mid-to-high teens” percentage. Bank of America warned its investment-banking fees could fall at least 10%.
Bank shares: The KBW Bank Index fell 6% in the third quarter and is down 13% from its August closing high.
Wider market: FactSet expects S&P 500 earnings to grow 29.5% year on year in the third quarter, with revenue up 12.3%, led by energy and technology.

The background

A bank earns money in two main ways. The first is the gap between what it pays depositors and what it charges borrowers, known as net interest income. The second is fees: advising on mergers, underwriting share and bond sales, and trading for clients.

Rising rates pull these in different directions. Think of a bank as a shop that buys money wholesale (deposits) and sells it retail (loans). When rates rise, the retail price goes up quickly, which helps. But if savers start demanding more for their cash, or move it into Treasury bills now yielding around 4%, the wholesale cost rises too. Meanwhile, the bonds banks already own lose value when yields climb, the problem that helped topple Silicon Valley Bank in 2023. Since then, most large banks have shortened the maturity of their bond portfolios to reduce that risk, according to an investor quoted by Reuters.

Dealmaking is the other swing factor. After a record second quarter, the surge in yields in late September slowed capital markets, and smart-ring maker Oura and SB Energy postponed planned stock market listings. On top of that, the Fed raised its benchmark rate to a 3.75%–4% range in September, while the economy added only 29,000 jobs that month and unemployment rose to 4.2%.

What it means for your money

Even if you never buy a bank share, these reports contain useful signals. The provision for credit losses — money banks set aside for loans they expect to go bad — is an early warning of whether households are struggling with credit cards and car loans. Commentary on loan demand hints at whether mortgages and business credit will get harder to obtain.

Deposit costs matter for savers too. If banks say they are paying more to keep deposits, competition for your cash is working. If not, it may be worth comparing rates. A simple illustration: $10,000 in an account paying 0.5% earns about $50 a year, while the same sum at 4% earns about $400 before tax. Check the terms, fees and deposit insurance of any account before moving money. For a closer look at how high rates are reaching home loans, see our explainer on why mortgage rates just hit 7.4%.

If you hold an index fund, the banks are a modest but meaningful part of it, and their tone often shapes market mood in the first weeks of the season. This is general information, not financial advice.

What to watch next

Loan-loss provisions: a sharp rise on cards and auto loans would suggest stress is spreading to households, a concern given that consumer sentiment just fell to 46.3 (our analysis).
Deposit costs and net interest income guidance for the rest of the year.
Executives’ outlook: what bank leaders say about the economy, dealmaking pipelines and the effect of 5%-plus long-term yields.
Macro dates: September consumer price data on October 14 and the Fed’s October 27–28 meeting. Follow them on our economic calendar.

Sources

Written by The Daily Economy editorial team with AI assistance and checked against the sources above. Read our editorial policy.

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