JPMorgan Chase reported higher third-quarter 2026 profits, supported by growth in investment banking and trading revenue. However, the US banking giant fell short of analysts' profit expectations as weaker bond trading and a slowdown in dealmaking weighed on parts of its business.
The bank posted net income of USD 15.3 billion, or USD 5.57 per share, for the three months ended September 30. This compares with USD 14.4 billion, or USD 5.07 per share, in the same period a year earlier.
JPMorgan's markets division, which includes equity and fixed-income trading, recorded a 15% increase in revenue from a year earlier. Market volatility, driven by uncertainty over global interest rates and rising energy prices, prompted investors to adjust portfolios and hedge risk.
Equity markets revenue surged 49% during the quarter, while fixed-income trading revenue declined 4%. The contrasting performance highlighted continued strength in stock trading alongside softer activity in bond markets.
The bank's investment banking fees rose 14% year-on-year, supported by client activity. JPMorgan retained its position as the leading investment banking revenue earner, according to Dealogic data. However, the business faced challenges as companies navigated uncertainty over the Federal Reserve's interest-rate outlook and questions about the sustainability of AI-related spending.
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Despite higher net income, JPMorgan's earnings missed market expectations. Analysts forecast earnings of USD 5.85 per share, according to estimates compiled by LSEG, versus the reported USD 5.57.
The shortfall marked the bank's first quarterly profit miss since the fourth quarter of 2023, according to LSEG data.
Investment banking and trading performance also fell short of the bank's earlier expectations. In September, JPMorgan Co-President Doug Petno said investment banking fees and markets revenue were expected to rise in the mid-to-high teens during the third quarter.
Chris Marinac, director of research at Janney Montgomery Scott, said fixed-income trading, equity underwriting, and debt underwriting slightly missed market consensus.
Wall Street's dealmaking activity began the year strongly, highlighted by the historic listing of Elon Musk's SpaceX. However, the IPO market has slowed in recent weeks, creating uncertainty about the outlook for investment banking fees.
Analysts have described the IPO market as selective rather than closed, with delayed offerings potentially returning if market conditions stabilize in the fourth quarter.
JPMorgan Chief Executive Officer Jamie Dimon said investment banking fees rose at a mid-teens rate, supported by strong client activity, though activity moderated somewhat during the quarter.
JPMorgan's results reflect opportunities created by volatile markets, alongside challenges from slower dealmaking and weaker bond trading. Equity market performance helped offset some of the pressure on fixed-income revenue.
Investors will continue to watch interest-rate expectations, corporate fundraising and trading activity for signs of how the bank's major businesses will perform in the coming quarters.