Banks rake in big profits as both Wall Street and the US consumer stay
strong
[July 15, 2026] By
MATT OTT
WASHINGTON (AP) — Five of the biggest U.S. banks reported record profits
on Tuesday, boosted by their trading desks and a remarkably resilient
American consumer amid persistent global economic uncertainty.
It marks the second straight quarter of strong results from the banks,
which have benefited from market volatility since the Iran war began in
late February.
Both consumer-facing and market-focused banks reported revenue and
profit growth that beat even the most optimistic Wall Street
expectations.
The KBW Nasdaq Bank Index, which tracks the performance of two dozen
banks rose 0.7% in afternoon trading.
Here's a look at how and why banks have continued to thrive despite a
clouded economic future.
JPMorgan hits records
JPMorgan Chase logged $16.9 billion in second-quarter profit as its
equities trading division again took advantage of market volatility
triggered by the war in Iran.
The nation's largest bank by asset size, JPMorgan said that revenue in
every line of its business hit record levels in the quarter, including
its markets division, where revenue grew 35% over the same period last
year. Revenue in its equity markets division skyrocketed 86%.
JPMorgan earned $6.14 per share in the period, beating analyst estimates
of $5.59 per share. Managed revenue came in at $58 billion, also topping
the estimates of analysts surveyed by FactSet.
JPMorgan shares rose 1.8% by midday.
The consumer keeps spending
Bank executives highlighted a surprisingly strong U.S. consumer even as
inflation remains elevated, in part due to the higher oil prices brought
about by the war in Iran.
Bank of America said that consumer spending expanded, outperforming
expectations. Consumer investment assets grew 18% year-over-year and
average deposits and spending all increased from the first quarter, the
bank said.
JPMorgan reported revenue of $20.3 billion from its consumer banking
division in the period, a year-over-year increase of 8%.
Wells Fargo also reported improved consumer activity, reflecting a
broadly healthy U.S. economy.
“Consumer spending is higher, charge-offs and delinquencies are lower,
and savings and investments are growing across consumer segments,” Wells
CEO Charlie Scharf said.
The unresolved conflict in the Middle East, however, remains a potential
economic hurdle for consumers and businesses alike.
Oil prices fell back near prewar levels earlier this month, but they’re
back up more than 10% this week after the U.S. renewed attacks on Iran
and President Donald Trump announced a new blockade in the Strait of
Hormuz, a key shipping route for about one-fifth of the world’s oil. At
$3.86 per gallon, gas prices remain well above prewar levels but below
their peak of around $4.50 in May.
Dimon said on a conference call that JPMorgan remains “appropriately
cautious” in light of the current global economic risks.
“We cannot predict how these forces will ultimately play out,” Dimon
said. “They may remain manageable, but they could also cause meaningful
disruptions when they shift or collide.”
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In this Monday, Oct. 21, 2013, file photo, the JPMorgan Chase & Co.
logo is displayed at their headquarters in New York. (AP Photo/Seth
Wenig, File)
 IPOs and mergers expected to stay
hot through 2026
Dimon said that revenue from the New York bank's investment banking
division rose 30%, accelerating to the highest level since 2021 as
the thirst for initial public offerings and mergers and acquisitions
remained strong.
All the major banks played a role in SpaceX's record-setting IPO in
June, with Goldman Sachs and Morgan Stanley acting as lead
underwriters. The offering brought in $75 billion, more than all
U.S. IPOs combined in 2024 and 2025, according to Renaissance
Capital.
Renaissance expects the IPO market to extend its hot streak into the
second half of this year, also driven by larger deals such as Korean
memory chip giant SK Hynix’s “mega-listing” on Friday that raised
$26.5 billion.
Global mergers and acquisition activity also accelerated in the
second quarter of 2026, with announcements up 64% year-over-year and
closings up 33%, according to Morgan Stanley.
Goldman Sachs said revenue from advising on mergers and acquisitions
in the second quarter rose 17%.
Iran war the main source of market volatility
Markets have been swinging up and down since the U.S. and Israel
attacked Iran in late February, with military strikes from both
sides interspersed with pauses in fighting and vague temporary
truces.
Investors’ concerns that the war will last a long time has triggered
high volumes of selling in financial markets, while hopes for a
resolution and a freer flow of crude oil has inspired optimism and
buying.
Though volatile markets can cause anxiety for individual investors,
high-speed Wall Street trading desks can take advantage of the wild
gyrations. Big swings in markets tend to increase activity on
trading desks, leading to higher commissions and fee revenue for the
banks.
Goldman Sachs said it brought in $15.52 billion in revenue from its
banking and markets division in the period, 53% higher than last
year's second quarter and a 22% increase over 2026's first quarter.
Citigroup's market revenue also topped its first quarter figure and
was up 45% over the same period last year.
Overall strong second-quarter results
Wells Fargo reported a 22% jump in net income for the quarter to
$6,4 billion. Revenue of $22.6 billion topped Wall Street estimates.
Scharf said the San Francisco bank benefited from a strong economy
and its newly unleashed ability to invest after years of government
oversight. Shares of Wells Fargo fell 2.6% at midday.
Goldman Sachs earned $6.6 billion in the quarter, or $20.98 per
share, on $20.3 billion in revenue. Its shares rose more than 7%.
Bank of America’s profit rose to $9.1 billion, up 27% from a year
ago. Bank of America’s shares climbed 1.7%.
Citigroup also beat Wall Street's projections for revenue and profit
but its shares fell 4.5%.
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