rewrite this title Banks kick off Q4 2025 earnings: What investors should watch

The US banking sector is stepping into the spotlight this week as the Q4 2025 earnings season begins with big names such as JP Morgan, Citibank, Goldman Sachs and Morgan Stanley. Just before the first report, investors’ mood has been soured by a sudden regulatory curveball. What to expect from the first earnings reports this quarter?

JPMorgan and BNY Mellon will set the tone when they report on Tuesday, January 13, followed by Bank of America, Citigroup, and Wells Fargo the next day. While consensus expectations point to solid year-over-year revenue growth, with particularly strong jumps expected at Citigroup, the headline numbers may take a back seat to management commentary. Investors are hungry for guidance on 2026 Net Interest Income (NII) and how these institutions plan to navigate a potential environment of capped lending rates and shifting Federal Reserve policy.

Credit quality remains a critical theme to watch. While the narrative has been one of resilience, analysts will be looking for any signs of rising charge-offs in consumer portfolios or stress in commercial credit. Any cracks could challenge the outlook that has supported bank stocks throughout 2025. With the broader market expecting roughly 8% earnings growth this quarter, there is little room for error.

While the S&P 500 remains near record highs, a government proposal to aggressively cap credit card interest rates at 10% has injected a fresh layer of policy risk into the banking sector just ahead of earnings. With US credit card APRs often exceeding 20%, a 10% limit would directly slash net interest margins on revolving balances. JPMorgan, Citigroup, and Bank of America must now balance their financial results against a backdrop of uncertainty that could fundamentally reshape the profitability of consumer lending.

Ultimately, these bank results serve as a proxy for the entire US economy. Because the S&P 500 is currently priced on the high end of its historical range, the guidance provided by bank CEOs will dictate whether the stock market rally can extend into 2026. If the major lenders signal a cautious tone on loan demand or capital markets activity, we could see a spike in volatility that may spread beyond the financial sector.

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