JPMorgan Stock Wavers Post-Earnings: NII Upgrade, Record Trading, and Macro Risks Leave Traders Split
JPMorgan’s third-quarter scorecard had something for everyone—and that was precisely the problem for the tape. The bank delivered a clean beat, raised its 2025 net-interest-income bar, and posted a record haul in Markets, yet the stock zig-zagged as investors weighed sturdier earnings power against stickier expenses, cautious credit signals, and a foggy macro outlook.
The Print: Beats Across the Board, Led by Trading Muscle
Profit rose 12% year on year to $14.4 billion (EPS $5.07) on managed revenue of roughly $47.1 billion. Net interest income reached $24.1 billion for the quarter, up modestly, while non-interest revenue advanced solidly on vigorous client activity. Markets revenue set a third-quarter record at $8.9 billion, with equities up ~33% and fixed income up ~21%, reflecting portfolio repositioning and healthy liquidity across desks. Investment-banking fees climbed in the mid-teens as dealmaking and underwriting revived, adding a second engine to the fee side.
Why it matters: In a late-cycle environment, banks need more than NIM to carry the load. JPMorgan showed the breadth—trading, IB, payments, and wealth—that supports double-digit ROTCE even as rates drift and deposit costs settle.
Guidance: A Higher NII Bar, With Cleaner Bridges
Management nudged its 2025 total NII outlook to about $95.8 billion (roughly $92.2 billion ex-Markets). For near-term modeling, the bank guided to ~$23.5 billion NII ex-Markets in Q4, helping analysts connect quarterly run-rates to the full-year math. The message is subtle but market-moving: spread income looks more durable than feared, supported by steady consumer revolving balances and stable wholesale deposits.
Takeaway for multiples: Even a few hundred million dollars of incremental NII can stabilize next-twelve-months EPS and support a higher price-to-tangible-book—especially when paired with fee resilience.
The Pushback: Costs, Credit, and Macro Clouds
Bulls saw stronger earnings visibility; bears saw reasons to fade the first pop.
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Expenses: Non-interest expense rose high single digits, reflecting revenue-linked compensation, front-office hiring, and tech and distribution costs. Management tightened guardrails, but investors want clearer evidence that the spend arc is bending into 2026.
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Credit: The provision for credit losses was ~$3.4 billion, with net charge-offs near $2.6 billion and a modest reserve build—prudent rather than alarming, but a reminder that card and wholesale credit are normalizing.
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Macro: Sticky inflation pockets, geopolitics, tariff uncertainty, and rate-path ambiguity keep the outlook cloudy. A softer growth patch could pressure fee velocity and elevate funding-cost sensitivities even if headline NII holds.
The Tape Reaction: Why Shares Whipsawed
The initial rally fit the textbook—beat + guidance lift = multiple support. As the session wore on, traders drilled into the quality of earnings: record Markets revenue is great, but less repeatable; NII ex-Markets stability is crucial, yet not immune to deposit mix shifts; expense discipline is improving, but not proven. The result was a tug-of-war between longer-horizon holders upgrading their earnings bridge and short-term players fading the “perfect quarter” narrative.
Snapshot: The Numbers Traders Care About Most
| Line Item | Q3 Result / Update | Read-Through |
|---|---|---|
| Net income (EPS) | $14.4B ($5.07) | Clean beat supports ROTCE near 20% |
| Managed revenue | ~$47.1B, +9% YoY | Broad-based, not just rate-driven |
| NII (total) | $24.1B | Modest growth despite lower-rate backdrop |
| Markets revenue | $8.9B record | Equities +33%, FICC +21%—client activity strong |
| 2025 NII guide | ~$95.8B total / ~$92.2B ex-Mkts | Eases fears of rapid NIM compression |
| Q4 NII ex-Mkts | ~$23.5B | Clear near-term bridge for models |
| Provision / NCOs | ~$3.4B / ~$2.6B | Normalization, not stress |
What Bulls and Bears Will Watch Into Q4
Bulls want confirmation that fee engines stay lively while expenses plateau. If IPO/M&A pipelines and trading conditions remain constructive, the bank can offset any gentle NIM drift and preserve ROTCE near historical highs.
Bears will focus on funding costs and mix, card charge-off trajectories, and any cooling in client activity that could trim non-interest revenue. A tougher macro tape or faster-than-expected deposit repricing would challenge the current valuation.
Editorial View: A Quality Beat, but Execution Still Rules
JPMorgan gave the market what it asked for: higher NII, record Markets revenue, and clearer bridges. The wobble in the stock isn’t a verdict against the quarter; it’s a reminder that late-cycle bank rallies require continuous proof. If management locks in expense discipline and credit normalization stays orderly, the path to sustained multiple repair remains open. Until then, expect two-way price action—because when a report checks this many boxes, the debate naturally moves to how many can stay checked at once.
