Bank executives called consumers and companies resilient this summer. We’ll see if they still feel that way later this week. Several major banks are slated to hand in third-quarter results in the coming days, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs. Last quarter, several financial services firms handily beat expectations. But many market watchers may tune in for the commentary—from executives like Jamie Dimon, David Solomon, and others—as much as the numbers. Bank executives this summer generally described the U.S. economy as healthy and investors and businesses as resilient. These remarks came amid enthusiasm for bank stocks. Trading volume was up, merger and acquisition activity was brisk, and the prospect of higher interest rates seemed to bode well for net interest income (NII). Elevated interest rates tend to increase NII, the spread between what banks earn on assets and pay on deposits. A high-interest-rate environment tends to bolster bank profits, though it can also curtail borrowing. That risk may be one reason bank stocks have slumped in recent weeks. The S&P 500 financial sector has fallen more than any other sector in the past month, dropping about 4%. In contrast, the sector was climbing and among the index’s top performers heading into the second quarter.
What analysts are saying about U.S. stocks
JPMorgan: “Q3 reporting season is about to start. Given the increased volatility in the past weeks on a number of fronts, a lot is at stake. We find that investors in general have a constructive view on earnings but are concerned that actual results might underwhelm. We believe that earnings will be a support for the market.”
Evercore ISI: “Focus directed intently on financials at first. Recent underperformance has pushed XLF to the critical 200 DMA—raising the potential for EPS surprises and guidance to catalyze stocks, up or down. There will be volatility as investors hang on every word from the big banks this week.” “Long term, the bull market remains intact.”
Goldman Sachs: “The shifting balance of corporate supply and demand adds pressure on equity valuations, but we do not expect increasing equity supply to derail the bull market. Strong demand from households and foreign investors totaled more than $1 trillion in H1 2026, and our outlook for continued economic and earnings growth alongside declining interest rates should support continued investor demand for equities in 2027.”
RBC Capital Markets: “Though the U.S. equity market has been resilient in recent trading, we continue to believe that a tier 1/garden variety pullback of 5-10% in the S&P 500 in the near term (coming weeks/months) is overdue. Risk of a tier 2/growth-scare pullback of 14-20% has also moved up but is not our base case.”