JPMorgan Chase (NYSE: JPM) shares rose 1.71% to $340 in pre-market trading on Tuesday, despite the banking giant reporting its first quarterly earnings miss since late 2023, as weaker bond trading, a sequential decline in investment banking fees, and investment securities losses weighed on third-quarter results.
The stock recovered after falling nearly 3% after the earnings announcement.
The bank reported earnings of $5.57 per share for the quarter ended September 30, below the $5.85 analysts expected, according to LSEG estimates. Net income nevertheless rose 6% year over year to $15.3 billion, while managed revenue, which adjusts tax-exempt earnings to their taxable equivalent, climbed 8% to $50.9 billion. Revenue reported under U.S. accounting standards was $50.2 billion.
The results also included $658 million in investment securities losses, reducing earnings by $0.18 per share. Excluding that charge, JPMorgan earned $5.75 per share and generated $15.8 billion in net income, although adjusted earnings still fell short of the LSEG consensus estimate.
Weak Bond Trading and Underwriting Pressure Earnings
Fixed-income trading was a major source of weakness. Revenue from this business fell 4% year over year and 11% from the previous quarter to $5.37 billion, below the roughly $6 billion analysts expected.
The decline reflected weaker activity across commodities, interest-rate products, credit and public finance, partly offset by stronger currencies and emerging-markets trading.
The slowdown contrasted with JPMorgan’s equity trading business, where revenue surged 49% year over year to approximately $5 billion. That helped overall markets revenue increase 15% to $10.3 billion, although equity trading revenue also declined 18% from the second quarter.
Investment banking showed a similar pattern, with activity increasing year over year but declining quarter over quarter.
Fees from advising on transactions and underwriting securities totaled about $3 billion, up 14% year over year but down 8% from the previous quarter. Equity underwriting fees fell 32% from the second quarter to $564 million, while debt underwriting fees declined 15% to $1.22 billion. Advisory fees, by contrast, rose 21% to $1.22 billion.
Chief Executive Jamie Dimon acknowledged that client activity had moderated during the quarter, even as the bank continued to report annual growth in both investment banking and trading.
In September, JPMorgan co-President Doug Petno projected mid-to-high-teens year-over-year growth in both investment banking fees and markets revenue. The actual gains were 14% and 15%, respectively, leaving investment banking fees slightly below the indicated range and markets revenue near its lower boundary.
Stronger Lending Income and Higher Outlook Offset Some Weakness
Outside capital markets, JPMorgan continued to benefit from growth in its lending and deposit businesses.
Net interest income excluding markets, which broadly measures the difference between interest earned on loans and other assets and interest paid on funding, increased 6% year over year to $24.7 billion. Average loan balances rose 10%, while average deposits increased 8%.
The bank’s consumer and community banking division reported a 13% increase in net income to $5.7 billion, supported by higher card-related interest income and lower credit-loss provisions. Firmwide credit costs totaled $2.7 billion, compared with $3.4 billion a year earlier.
JPMorgan also raised its full-year 2026 net interest income outlook to approximately $106.2 billion, up from its previous projection of $105.5 billion. The forecast excluding markets increased to $97.2 billion from $96.5 billion. The bank additionally provided a preliminary 2027 projection of about $107 billion in net interest income excluding markets, subject to market conditions.
Dimon said the U.S. economy continued to benefit from business investment and consumer spending, while warning that persistent inflation, higher interest rates, elevated asset prices and geopolitical uncertainty remained risks.
Separately, JPMorgan Chase Tokenized Stock (Ondo), trading under the ticker JPMon, was quoted at $344.40, up 1.58% over the past 24 hours, according to CoinMarketCap data. The Ondo-issued tokenized instrument provides economic exposure linked to JPMorgan shares but is separate from the company’s NYSE-listed common stock. Its 24-hour performance therefore should not be treated as the same measure as JPMorgan’s pre-market share-price change.