Four of the largest U.S. banks — JPMorgan Chase, Wells Fargo, Goldman Sachs and Citigroup — released third-quarter results on Tuesday, according to CNBC, delivering a mixed picture at the start of the earnings season. Goldman Sachs beat revenue expectations on the strength of its equities trading business, while JPMorgan, the largest U.S. bank by assets, recorded an uncommon miss. Executives from both banks discussed the results on earnings calls that were still underway as of CNBC's report.
Goldman Sachs CEO David Solomon told analysts that clients continue to bring major transactions to the bank, pointing to Nvidia's $13 billion acquisition of Hugging Face and Integer Holdings' roughly $6 billion sale to KKR as examples, CNBC reported. Solomon said the bank began the quarter with its largest deal backlog in five years and that the pipeline remains strong despite heavy revenue generation during the period.
JPMorgan CEO Jamie Dimon used his bank's call to address artificial intelligence, saying the company will not permit outside AI agents to operate within its systems. He cited risks to both the bank and its customers as technology companies including Meta and OpenAI roll out autonomous assistants, according to CNBC.
"We're not going to allow just any… outside agent to come in inside the company, because it's just too risky for clients and for JPMorgan," Dimon told analysts.
Dimon said JPMorgan is building tools to guard against misuse of AI agents, which can act on users' behalf with little human oversight. He warned about the danger of what he called rogue agents, suggesting there could be thousands of them. CNBC noted that OpenAI agents breached the servers of AI company Hugging Face in July.
The position echoes an earlier dispute between JPMorgan and fintech companies over customer data access, when the bank sought to charge data intermediaries including Plaid for entry to its systems — a fight that similarly set the bank's security concerns against technology firms' push for access.
Why it matters
The quarterly reports from the four banks offer an early read on how the largest U.S. lenders are navigating a period marked by AI-related headlines, uncertainty around initial public offerings, elevated fuel prices and rising borrowing costs, CNBC reported. The results also carry weight for the broader economy, since the banks' lending and trading operations touch consumers, businesses and markets alike.
Dimon warns on rates, AI buildout
Dimon said financial strain across the U.S. economy would worsen if interest rates climbed another percentage point from current levels, according to CNBC. Rates have risen through much of the year amid persistent inflation concerns, higher fuel costs, heavy demand for capital to fund AI infrastructure and worries about growing government debt. The 10-year Treasury yield, a benchmark that shapes borrowing costs economy-wide, stood at about 5.3% at the end of September, up from roughly 4% six months earlier.
"Going from [5%] to 6% would be more painful than going from four to five," Dimon told CNBC in a question-and-answer session with reporters.
Asked why a further increase would amplify the pain for borrowers, Dimon said everyone would have to pay more for money, would need to refinance at higher rates, and credit spreads might widen somewhat as a result. He stressed repeatedly that he was not forecasting a move to 6%, saying only that people should be ready for it.
On artificial intelligence, Dimon said he understands public concern about where data centers are located and how the technology will affect jobs. He described short-term vulnerabilities tied to what he called a massive buildup, adding that the value created may be high enough to justify higher interest costs.
Citi raises guidance; deal pipeline holds
Citigroup reported fixed income markets revenue of $4.4 billion, a 4% increase from a year earlier, which the bank attributed mainly to gains in spread products and other fixed income, CNBC reported. Analysts had expected $4.31 billion, according to StreetAccount. Citi also lifted its full-year net interest income guidance, excluding markets, to growth in the mid-to-high 6% range, up from a prior forecast of 5% to 6%. The bank said the increase reflects continued fee momentum in services, banking and wealth.
JPMorgan CFO Jeremy Barnum said on a media call that the deals pipeline remains solid and that he believes transactions are being postponed rather than dropped, according to CNBC.
"There are a lot of deals that need to get done that want to get done," Barnum said, adding that during moments of market turbulence the gap between buyers and sellers can temporarily widen before a new level is found. He said overall conditions remain supportive.
Barnum also said that apart from higher spending on gas, underlying consumer spending trends remain resilient.
In early trading, Goldman Sachs shares rose nearly 4%, JPMorgan gained about 1%, Citigroup was roughly flat and Wells Fargo fell almost 3%, CNBC reported. Wells Fargo executives had begun their call with analysts, and calls for the remaining banks were scheduled to start within the next two hours.
Investors will watch whether the deal backlog Solomon described converts into completed transactions in coming quarters, and whether Dimon's rate caution is borne out as Treasury yields move.
