Priced for near-flawless execution, can Wall Street's traditional banks clear an unforgiving hurdle rate in Q3? Explore how shifting deposit costs, credit loss provisions and capital markets momentum could shape the next phase of sector performance.
What Q3 needs to prove
Q3 starts with 3 questions
The third-quarter (Q3) US earnings season opens with JPMorgan Chase, Goldman Sachs and Bank of America, and Q2 has already set the benchmark. All 3 reported strong headline results, helped by trading, investment banking and resilient core banking revenue. But the early Q3 signals are no longer moving in the same direction.
JPMorgan expects investment banking fees and markets revenue to remain strong. Goldman Sachs has pointed to another strong equities quarter but softer fixed income, currencies and commodities (FICC). Bank of America has already flagged weaker investment banking fees and roughly flat trading revenue.
That makes the Q3 reports a test of what is still carrying earnings, and where pressure may be starting to appear.
What traders are asking
Are trading and investment banking still carrying earnings?
The question for this quarter is whether Q2's capital markets strength has continued across the sector, or whether the split between the 3 banks is starting to widen.
Can net interest income hold as funding costs change?
Deposit pricing is central to the Q3 read and traders are asking if JPMorgan's full-year NII outlook and Bank of America's sequential NII trend show whether margins are still holding?
Is credit quality beginning to weaken?
The next question is whether consumer and commercial credit remain stable, or whether higher delinquencies, charge-offs or provisions begin to change the picture.
For traders, the headline beat or miss will matter. But the mix underneath it may say more about whether Q2's strength was durable and what the banks are carrying into Q4.
JPMorgan Chase preview
JPMorgan Chase & Co.
Expectations
Estimates gathered from third-party market data configurations for the cycle ending September 2026.
Global release
Timezone matrices synchronized automatically with regional local session open and close constraints.
JPMorgan Chase key trends
JPMorgan enters Q3 with a tougher comparison than most of its peers, but management has already given the market reason to expect that some of Q2's strength carried through. Q2 managed revenue reached US$58.0 billion, while earnings per share (EPS), excluding significant items, came in at US$6.14. Co-President Doug Petno said Q3 investment banking fees and markets revenue were expected to rise by a mid-to-high-teens percentage year on year.
The next test is whether that strength is broad enough to support the rest of the earnings mix, particularly net interest income, credit costs and the outlook into Q4.
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Consumer and community banking: The consumer business provides another view of household activity. Key areas remain credit card spending, revolving balances, deposit trends and net charge-offs. A resilient consumer book supports earnings, whereas a sharper increase in delinquencies could change the discussion quickly.
Watch: Credit card spending and net charge-offs -
Commercial and investment bank: Expectations have already moved higher following Petno's September comments. Debt and equity underwriting, advisory fees, equities trading and fixed income trading will show how broad strength has been.
Watch: Investment banking fees and markets revenue -
Asset and wealth management: Offers a different earnings stream from lending and trading. Organic net inflows, fee revenue and client balances provide signals on whether market volatility has changed investor behaviour.
Watch: Organic net inflows and fee revenue -
The US$105.5 billion NII outlook: JPMorgan maintained an outlook of about US$105.5 billion for 2026 NII in its Q2 materials. Any change to this guidance is highly relevant.
Watch: 2026 NII guidance adjustments -
Credit reserves & regulatory capital: The key question is whether the current reserve position remains appropriate if consumer or commercial credit metrics deteriorate. Capital buffer commentary will contextualise management's priorities heading into 2027.
Monitor: Allowance for credit losses and regulatory capital
Capital markets momentum holds | Resilient NII & credit
A result above current EPS and revenue expectations, combined with resilient NII and stable credit metrics, could reinforce the view that Q2's strength extended into Q3. Markets and investment banking would be particularly important given management's September guidance.
Possible market reaction: Could reinforce confidence across the broader banking sector.
In-line headline | Softer NII or credit costs offset trading
An in-line headline result could still produce a mixed reaction if the composition is weaker. For example, strong trading could offset softer NII or higher credit costs. In that case, management's forward guidance may matter more than the headline EPS number.
Possible market reaction: Market response will hinge directly on guidance adjustments.
Softer capital markets | Reduced NII guidance & credit costs rise
A weaker result could attract more attention if it combines softer capital markets revenue with a reduction in NII guidance or a material rise in credit costs. That combination would suggest the weakness is broader than a single volatile revenue line.
Possible market reaction: Shares could face pressure if weakness extends into core banking lines.
Track the bank earnings setups.
Read our technical analysis on major banking infrastructures ahead of the reporting window.
Goldman Sachs preview
Goldman Sachs Group, Inc.
Expectations
Estimates gathered from third-party market data configurations for the cycle ending September 2026.
Global release
Timezone matrices synchronized automatically with regional local session open and close constraints.
Goldman Sachs key trends
Goldman's Q2 numbers were exceptional. Net revenue reached US$20.34 billion and EPS came in at US$20.98, while annualised return on common equity reached 23.5%. The Q3 set-up already looks different. Chief Executive David Solomon said in September that equities remained very strong, while the FICC business had been relatively softer.
That split matters because Goldman is more directly exposed to capital markets activity than the large universal banks. A strong equities quarter does not necessarily mean every part of the franchise moved in the same direction.
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The investment banking question: Goldman entered the year with a substantial pipeline of announced transactions. However, advisory fees depend on transactions closing and underwriting depends on issuance reaching market. Completed M&A, debt issuance and equity capital markets activity matter more than backlog size alone.
Watch: Completed M&A and underwriting conversion -
Trading mix (Equities vs. FICC): Equities remained strong according to Solomon's September update, while FICC has been softer on a relative basis. Investors will check if equities strength offsets slower fixed income activity.
Watch: Equities trading performance vs. FICC softness -
Asset and wealth management: Provides another source of fee income alongside exposure to private-market valuations and balance-sheet investments. Key areas include management fees, private wealth inflows and alternative investment performance.
Watch: Management fees and alternative investment performance -
Returns and costs: Solomon indicated non-compensation expenses may rise as the firm continues investing in technology and responds to transaction activity. Managing operating leverage is key after Q2's 23.5% return on common equity.
Monitor: Non-compensation expense trajectory
Advisory & underwriting surge | Expense growth controlled
A stronger result would likely require more than another good equities quarter. Higher advisory and underwriting revenue, resilient asset and wealth management earnings and controlled expense growth could help show that the strength extends across the franchise.
Possible market reaction: Reassures investors that capital markets recovery is expanding.
Strong equities | Relative FICC softness
An in-line result with strong equities but softer FICC would broadly match the picture management outlined in September. The market response could then depend more heavily on investment banking conversion and the outlook for expenses.
Possible market reaction: Shares may trade range-bound pending forward pipeline commentary.
Advisory conversion fails | FICC weakens & costs overshoot
A weaker result could matter more if advisory fees fail to convert, FICC softness is broader than expected and costs rise faster than revenue. That would raise questions about how much of the Q2 earnings level was repeatable.
Possible market reaction: Could trigger concern over operating leverage and transaction timing.
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Bank of America preview
Bank of America Corp.
Expectations
Estimates gathered from third-party market data configurations for the cycle ending September 2026.
Global release
Timezone matrices synchronized automatically with regional local session open and close constraints.
Bank of America key trends
Bank of America's set-up is different because management has already given the market a more cautious Q3 guide. Chief Executive Brian Moynihan said in September that Q3 investment banking fees were expected to fall by at least 10% year on year, with revenue between US$1.6 billion and US$1.8 billion. He also said sales and trading revenue was expected to be roughly flat compared with the US$5.4 billion recorded in Q3 2025.
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Consumer banking and deposits: Average deposits reached US$2.02 trillion in Q2, up over 2% YoY, while loans rose 8%. Q2 did not show broad deposit flight. For Q3, important measures are deposit balances, deposit pricing and whether loan yields offset funding costs.
Watch: Deposit balances and deposit pricing -
The securities book: As lower-yielding securities mature, reinvestment at different market rates changes the NII profile over time. The key question is whether that process continues to support sequential NII without creating additional pressure elsewhere, particularly as markets monitor shifts in Treasury yields.
Watch: Sequential NII support vs. balance sheet pressure -
Investment banking and trading: Investment banking fees of US$1.6B to US$1.8B mark a decline YoY, while flat trading marks a slowdown from Q2's 33% increase. If NII and consumer activity stay resilient, softer capital markets revenue may be absorbed.
Watch: Advisory fees and sales & trading revenue -
Credit quality: Q2 provision for credit losses was US$1.4 billion, down from US$1.6 billion a year earlier. Moynihan said consumer credit quality remained strong. A modest change is viewed against a healthy starting point.
Watch: Card and commercial loan delinquency metrics
NII holds | Advisory upper end & trading resilient
A stronger result could come from NII holding up better than expected, investment banking fees landing near the upper end of management's range and trading revenue proving more resilient. Stable credit metrics would strengthen that picture.
Possible market reaction: Supports confidence in commercial banking stability.
Advisory & trading match guide | Focus turns to NII
A result close to consensus, with investment banking and trading broadly matching management's September comments, would turn attention towards NII and deposits. Those lines could determine whether the quarter is read as stable or as an early sign of margin pressure.
Possible market reaction: Shares may hold steady as attention shifts to funding costs.
Soft capital markets | Deposit costs rise & credit deteriorates
A weaker result could become more significant if softer capital markets revenue is accompanied by higher deposit costs, weaker NII or deteriorating credit. That would suggest pressure is moving beyond the businesses management had already flagged.
Possible market reaction: Shares could face pressure if credit strain or deposit repricing accelerates.
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What comes next
Q3 bank earnings should show whether the strength seen in the second quarter was broad enough to carry into year end, or whether the pressure is beginning to shift between trading, lending, funding costs and credit.
JPMorgan gives the market one of the first reads, followed by Goldman Sachs and Bank of America. Together, the results should provide a clearer picture of where financial conditions are holding up and where the cracks, if any, are beginning to appear.
And that is where the next phase of the story starts.
For readers following the broader earnings season, GO Markets will continue tracking the results, market reaction and the signals carrying into Q4.
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Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice.
