As it does every quarter, JPMorgan Chase (NYSE:JPM), the largest U.S. bank, will kick off earnings season tomorrow morning by releasing its third-quarter results before the market opens. Management, led by CEO Jamie Dimon, will then hold a live conference call with analysts. Investors across the market are always interested in what the big banks, particularly JPMorgan, have to say because they serve as an indicator of the economy and show how consumers and businesses are holding firm. Did you miss AI’s “Act 1”? The second act could be 14 times bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1”: the R&D phase. “Act 2” is the global launch. Continue » Bank stocks have also come under pressure amid skyrocketing bond yields, which may impact banks in a variety of ways. Here’s why JPMorgan’s earnings report tomorrow could send shares tumbling. Image source: The Motley Fool. How Rising Bond Yields Are Putting Pressure on Bank Stocks Rising bond yields have taken their toll on the stock market, and big banks have not been spared. Banks are a very sensitive sector to interest rates, so it makes sense. ^IXBK data from YCharts Bond yields increase banks’ funding costs and raise the cost of capital in capital markets, which may slow investment banking activity. They can also slow down credit activity by making borrowing more expensive. While bond yields will also increase interest income, potentially increasing income in bank loan portfolios, they may also put pressure on borrowers with adjustable rate loans and those who refinance. That is why bank credit will be the center of attention. It has been benign for a long time and higher yields will make investors more nervous about a credit cycle. Still, the full effects of rising bond yields may not be felt yet, and JPMorgan largely expects a strong third quarter for investment banking and trading. During a Sept. 15 conference, JPMorgan Chase co-president Doug Petno said the bank expects investment banking fees and markets revenue to grow in the “mid-to-high teens” percentage range in the third quarter. In the second quarter, these firms posted skyrocketing numbers with investment banking fees increasing 30% year over year and 14% from the previous quarter. Markets revenue, which can be influenced by trading activity, increased 35% year over year. It’s a tough comparison, especially for investment banking, which had its best quarter since 2021. Major initial public offerings, such as Space Exploration Technologies Corp, contributed to the excellent second quarter. The story continues Still, if Pento’s guide comes to fruition, it will still be very solid. “We entered this quarter with a strong pipeline that continues. I’m talking about management and board confidence, which is driving a tremendous amount of M&A activity. It’s the highest we’ve seen in some time,” he said during the September conference. Investors will look to find holes. Although the rise in bond yields has been priced in somewhat over the past month, it could still put pressure on parts of JPMorgan’s business, and I think investors will be very cautious of any signs of weakness. Wall Street analysts, on average, expect the bank to report $5.94 adjusted earnings per share on revenue of $51.22 billion. Additionally, management last quarter forecast full-year net interest income of $105.5 billion, including market revenue. Adjusted expenses are projected at $107.5 billion. Investors can sell the stock if the bank misses estimates or maintains its full-year guidance. Ultimately, I think investors have a high bar for earnings and could do more harm than good. For example, while Pento gave strong guidance on investment banking and markets, it still compares tough to the second quarter, and there have been rumors that trading and investment banking activity will slow. While the economy has been resilient, investors have been anticipating a credit cycle for some time, so any sign of deteriorating credit quality could trigger a sell-off. I don’t necessarily expect the quarter to be a disaster, but the slightest mistake or any sign of concern could lead the market to hit the sell button. Should You Buy JPMorgan Chase Stock Right Now? Before you buy JPMorgan Chase stock, consider this: the Motley Fool Stock Advisor team of analysts just identified what they believe are the 10 best stocks for investors to buy right now… and JPMorgan Chase wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $379,123!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,408,822!* Now, it’s worth noting that Stock Advisor’s average total return is 950%: A crushing market outperformance compared to the S&P 500’s 215%. Don’t miss the latest Top 10 list, available on Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 12, 2026. JPMorgan Chase is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool holds and recommends JPMorgan Chase. The Motley Fool has a disclosure policy. JPMorgan Chase’s upcoming earnings report tomorrow could send the stock tumbling. Here’s why. was originally published by The Motley Fool
