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.”
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%.
