Bank earnings are the traditional opening act of each reporting season, and this quarter’s show came with a twist. Trading desks were riding a strong year, dealmaking was recovering, and consumers were still spending. But the 10-year Treasury yield had climbed above 5%, the Federal Reserve had resumed raising rates, and bank stocks had lagged the broader market heading into the reports.

Results from the largest U.S. lenders for the quarter ended Sept. 30 arrived on Tuesday, Oct. 13, and gave a mixed but informative read on the economy. Here is what the numbers showed, what executives flagged as risks, and what comes next.

The setup: strong trading, nervous bond market

Heading into the reports, the KBW Nasdaq Bank Index had fallen about 9.7% over the prior month while the S&P 500 gained roughly 1.5%, according to figures cited in a pre-earnings preview. The 10-year Treasury yield had reached its highest level since 2002 and closed the prior Friday at 5.24%, and the Fed had delivered its first rate increase in more than three years.

Higher yields are a double-edged sword for banks. They can widen lending margins over time, but they also reduce the market value of bonds a bank already holds and can push depositors toward higher-yielding alternatives. That tension framed the quarter.

The comparison base was also high. In the second quarter, Goldman Sachs reported equities net revenues of $7.42 billion, up 72%, and JPMorgan reported equities markets revenue up 86% to $6.0 billion. Third-quarter results were therefore judged against a very demanding bar.

Goldman Sachs: equities and dealmaking lead

Goldman Sachs reported net income of $5.29 billion, up 29% from a year earlier, on total revenue of $18.68 billion, up 23%. The standout was equities trading, with revenue of $6.44 billion, up 72% year over year, though below the record $7.42 billion posted in the second quarter. Fixed income, currencies and commodities (FICC) revenue was $3.47 billion, down 1%, missing forecasts as credit, mortgage and rates trading softened. Investment banking fees rose 21% to $3.22 billion.

Chief financial officer Denis Coleman said demand for equity financing continues to exceed the banking industry’s available capacity. Chief executive David Solomon pointed to geopolitical uncertainty, political opposition to data centers and rate volatility as risks to AI-related infrastructure investment, a theme that matters for the firm’s financing business.

JPMorgan Chase: a profit miss and a warning on rates

JPMorgan, the nation’s largest bank, reported net income of $15.3 billion, up about 6% from $14.4 billion a year earlier but below the roughly $16.3 billion analysts had forecast. Fixed-income trading revenue was $5.4 billion, down 4%, while equities trading revenue was about $5 billion, up 49%, driven by prime brokerage and derivatives.

Two details drew attention. First, share repurchases fell to $664 million, down from more than $6 billion in the prior three-month period, even with excess capital of roughly $30 billion. Second, chief executive Jamie Dimon warned that further rate increases are a significant risk and said the bank is tightening lending standards. On the consumer, chief financial officer Jeremy Barnum said underlying spending remained strong with limited evidence of credit deterioration.

Citigroup: profit jumps on broad gains

Citigroup reported profit up 40% from a year earlier, with fixed-income trading revenue of $4.4 billion, up 4%. Reports indicate gains came from investment banking, services and wealth management. Headline figures circulating in market coverage put profit near $5.25 billion on revenue of about $23.85 billion, up 8%, but those numbers appeared in secondary summaries, so check the company’s earnings release before relying on them.

Wells Fargo: a consumer-focused read

Wells Fargo, which has less trading exposure than its Wall Street peers, was reported to have earned about $6 billion, up 6%, topping expectations, while revenue of roughly $21.87 billion and net interest income came in short of forecasts. Chief executive Charlie Scharf pointed to consumer spending, employment and wage growth as supports. As with Citigroup, readers should confirm exact figures against the company’s filing. Net interest income, the spread between what a bank earns on loans and pays on deposits, is the number to watch at lenders with large retail franchises.

What the results say about the economy

  • The consumer is holding up. Executives described spending as resilient and credit as stable so far, though they flagged inflation, elevated oil prices, higher rates and credit risk as watch items.
  • Capital markets are busy. Goldman’s 21% rise in investment banking fees and comments about demand for equity financing suggest companies are still tapping markets, particularly for AI-related projects.
  • Trading is strong but uneven. Equities desks thrived at both Goldman and JPMorgan, while fixed-income results were flat to lower. Volatility helps trading revenue, but the mix matters.
  • Capital return may be cautious. JPMorgan’s sharp drop in buybacks stood out and may reflect an effort to preserve flexibility in a higher-rate environment.

The inflation backdrop on Wednesday

Bank commentary landed just before the September Consumer Price Index, released Oct. 14. Headline CPI rose 0.6% on the month and 3.7% from a year earlier, above the 3.6% forecast, while core CPI rose 2.6% year over year, also above expectations. Energy and gasoline drove much of the monthly increase. Morgan Stanley, which was scheduled to report on Oct. 14 alongside Bank of America, is not covered here because its figures could not be verified for this article.

Hotter inflation matters for banks because it influences the Fed’s path. The central bank’s target range stands at 3.75%-4.00%, and its next policy meeting is Oct. 27-28. According to CME FedWatch figures cited by Fox Business after the CPI release, the probability of a hold fell to about 58.5% from 77.9%, with a quarter-point hike at about 41.5%.

Beyond banks: health care joins the parade

Earnings season broadened on Tuesday as UnitedHealth Group reported adjusted earnings of $4.69 per share on revenue of about $112.7 billion and raised its full-year adjusted EPS outlook to at least $20.50, while Johnson & Johnson reported adjusted EPS of $2.59 on revenue of about $25.4 billion. Health care was among the stronger sectors on Wednesday, up about 2.5% in a session when technology fell about 3%. Sector moves reflect many factors, so the link to any single report should not be overstated.

What to watch next

  • Net interest income and deposit trends. Do regional and super-regional banks report pressure from customers shifting to higher-yielding alternatives?
  • Credit quality. Watch provisions and charge-offs for signs that stress is moving from the margins to the mainstream consumer.
  • Trading sustainability. Will equities desks keep their pace if volatility cools, and can fixed-income desks recover?
  • Netflix on Tuesday, Oct. 20 and Tesla on Wednesday, Oct. 21. Both are scheduled to report third-quarter results, offering a read on consumer-facing and growth names after a rough tech session.
  • The Fed, Oct. 27-28. The decision and press conference are due Wednesday, Oct. 28, at 2:00 p.m. and 2:30 p.m. Eastern.
  • Treasury yields. The 10-year hovered near 5.2% this week; a sustained move either way would alter the bank-earnings calculus.

The bottom line

The third-quarter bank reports tell a story of two forces pulling in different directions: robust capital-markets activity and resilient consumers on one side, and rising rates, energy-driven inflation and cautious language from management on the other. Stock reactions to the reports were not verified for this article, so readers should look at market data directly. For the rest of earnings season, the key question is whether the strength seen at the largest, most diversified lenders extends to the broader economy.

This article is for information only and is not investment advice.