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Can JPM's Strong Q3 Capital Markets Outlook Help Sustain Fee Growth?
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Key Takeaways
JPM expects Q3 IB fees to rise y/y in the mid-to-high teens on broad-based strength and deal flow.
JPM sees Markets revenues rising in the mid-to-high teens, aided by fixed income and equities strength.
Higher activity-related costs may limit JPMorgan's operating leverage.
JPMorgan’s (JPM - Free Report) third-quarter 2026 outlook suggests that capital markets should remain a meaningful support to fee-driven revenues, even as activity normalizes sequentially from an exceptionally strong second quarter. Management expects third-quarter investment banking (IB) fees to rise in the mid-to-high teens year over year, supported by broad-based strength across products and geographies, and a robust deal pipeline.
The outlook is notable, given that JPMorgan generated $2.6 billion of IB fees in the third quarter of 2025. While the year-over-year setup remains favorable, some sequential cooling is likely after IB fees reached $3.2 billion in second-quarter 2026, aided by particularly strong equity underwriting activity. The expected moderation, however, appears more reflective of tough sequential comparisons than a deterioration in underlying deal activity.
Trading should provide an even larger cushion to non-interest revenues. JPMorgan expects third-quarter 2026 Markets revenues also to increase in the mid-to-high teens year over year, supported by broad-based strength across fixed income and equities. Markets revenues totaled $8.9 billion in third-quarter 2025 and a record $12.1 billion in second-quarter 2026, suggesting that some sequential normalization is likely here as well.
Overall, sustained year-over-year growth in IB fees and Markets revenues should help support third-quarter 2026 fee-driven revenues and reinforce the strength of JPMorgan’s Commercial & Investment Bank despite the seasonal pullback from the unusually strong second-quarter levels. JPMorgan recorded $22.5 billion of total non-interest revenues in the third quarter of 2025. Non-interest revenues in the Commercial & Investment Bank segment totaled $13.8 billion.
The key offset is expenses. Higher client activity and revenues can drive additional volume and compensation-related costs, limiting some of the operating leverage benefit. Still, with M&A activity described as among the strongest seen in some time and opportunities remaining broad across fixed income and equities, the capital markets backdrop remains supportive. The ultimate earnings contribution will depend on how efficiently JPMorgan converts that revenue strength into incremental profitability.
JPMorgan’s Competitive Landscape
Let us look at what Bank of America (BAC - Free Report) and Citigroup (C - Free Report) are saying about third-quarter 2026 capital markets revenues.
Bank of America’s third-quarter 2026 capital markets outlook points to a slowdown in fee-driven revenues after a strong first half. CEO Brian Moynihan expects IB fees of $1.6-$1.8 billion, below $2 billion in third-quarter 2025.
Trading is also losing momentum. Bank of America expects sales and trading revenues to be relatively flat year over year, implying $5.36 billion based on third-quarter 2025 levels. Combined, IB and trading revenues are likely to be $6.96-$7.16 billion, suggesting a fall from the $7.36 billion registered a year earlier.
Citigroup’s third-quarter 2026 outlook appears relatively upbeat. Management expects Markets revenues to grow in the mid-single digits year over year, supported by equities, financing and foreign exchange. Citigroup also projects IB revenues to increase in the low-single digits, with further upside possible if pending transactions close before quarter-end.
Over the past six months, JPM shares have gained 21.3% compared with the industry’s 22.8% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, JPMorgan trades at a 12-month trailing price-to-tangible book (P/TB) of 3.25X, marginally below the industry average.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for JPMorgan's 2026 earnings suggests a 22.7% rise on a year-over-year basis, while 2027 earnings are expected to grow at a rate of 0.4%. In the past 30 days, earnings estimates for 2026 and 2027 have moved upward to $24.95 and $25.04, respectively.
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Can JPM's Strong Q3 Capital Markets Outlook Help Sustain Fee Growth?
Key Takeaways
JPMorgan’s (JPM - Free Report) third-quarter 2026 outlook suggests that capital markets should remain a meaningful support to fee-driven revenues, even as activity normalizes sequentially from an exceptionally strong second quarter. Management expects third-quarter investment banking (IB) fees to rise in the mid-to-high teens year over year, supported by broad-based strength across products and geographies, and a robust deal pipeline.
The outlook is notable, given that JPMorgan generated $2.6 billion of IB fees in the third quarter of 2025. While the year-over-year setup remains favorable, some sequential cooling is likely after IB fees reached $3.2 billion in second-quarter 2026, aided by particularly strong equity underwriting activity. The expected moderation, however, appears more reflective of tough sequential comparisons than a deterioration in underlying deal activity.
Trading should provide an even larger cushion to non-interest revenues. JPMorgan expects third-quarter 2026 Markets revenues also to increase in the mid-to-high teens year over year, supported by broad-based strength across fixed income and equities. Markets revenues totaled $8.9 billion in third-quarter 2025 and a record $12.1 billion in second-quarter 2026, suggesting that some sequential normalization is likely here as well.
Overall, sustained year-over-year growth in IB fees and Markets revenues should help support third-quarter 2026 fee-driven revenues and reinforce the strength of JPMorgan’s Commercial & Investment Bank despite the seasonal pullback from the unusually strong second-quarter levels. JPMorgan recorded $22.5 billion of total non-interest revenues in the third quarter of 2025. Non-interest revenues in the Commercial & Investment Bank segment totaled $13.8 billion.
The key offset is expenses. Higher client activity and revenues can drive additional volume and compensation-related costs, limiting some of the operating leverage benefit. Still, with M&A activity described as among the strongest seen in some time and opportunities remaining broad across fixed income and equities, the capital markets backdrop remains supportive. The ultimate earnings contribution will depend on how efficiently JPMorgan converts that revenue strength into incremental profitability.
JPMorgan’s Competitive Landscape
Let us look at what Bank of America (BAC - Free Report) and Citigroup (C - Free Report) are saying about third-quarter 2026 capital markets revenues.
Bank of America’s third-quarter 2026 capital markets outlook points to a slowdown in fee-driven revenues after a strong first half. CEO Brian Moynihan expects IB fees of $1.6-$1.8 billion, below $2 billion in third-quarter 2025.
Trading is also losing momentum. Bank of America expects sales and trading revenues to be relatively flat year over year, implying $5.36 billion based on third-quarter 2025 levels. Combined, IB and trading revenues are likely to be $6.96-$7.16 billion, suggesting a fall from the $7.36 billion registered a year earlier.
Citigroup’s third-quarter 2026 outlook appears relatively upbeat. Management expects Markets revenues to grow in the mid-single digits year over year, supported by equities, financing and foreign exchange. Citigroup also projects IB revenues to increase in the low-single digits, with further upside possible if pending transactions close before quarter-end.
JPMorgan’s Price Performance, Valuation & Estimates
Over the past six months, JPM shares have gained 21.3% compared with the industry’s 22.8% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, JPMorgan trades at a 12-month trailing price-to-tangible book (P/TB) of 3.25X, marginally below the industry average.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for JPMorgan's 2026 earnings suggests a 22.7% rise on a year-over-year basis, while 2027 earnings are expected to grow at a rate of 0.4%. In the past 30 days, earnings estimates for 2026 and 2027 have moved upward to $24.95 and $25.04, respectively.
Image Source: Zacks Investment Research
Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.