What’s Happening With JPMorgan Stock?
JPMorgan stock (NYSE: JPM) has gained about 29% year-to-date, significantly outperforming the 17% rise in the S&P 500 index over the same period. So the question is obvious: why is JPMorgan still outperforming—and can it last?
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Is JPMorgan Executing Better?
Pretty much. The bank’s earnings momentum has been strong this year. Over Q3 FY25, managed revenue climbed 9% to $47.1 billion, while net income jumped 12% to $14.4 billion ($5.07 per share), beating expectations. The strength was broad-based. Asset & Wealth Management delivered higher fees as AUM surged 18% to $4.6 trillion; Investment Banking bounced back with a 16% rise in fees as M&A and ECM reopened; and Markets stayed a powerhouse with revenue up 25% year-over-year. JPMorgan also kept rewarding shareholders, deploying $8 billion in buybacks and paying a $1.50 dividend during the quarter.
Monetary Policy Tailwinds?
The macro backdrop has shifted decisively after the Federal Reserve’s latest move. On December 10, 2025, the Federal Open Market Committee (the Fed’s rate-setting body) delivered its third consecutive 25 bps cut, bringing the federal funds rate down to 3.50%–3.75% and marking a clear turn from the hawkish stance earlier in the year. Markets reacted quickly with Treasury yields pulling back after Chair Powell signaled that further hikes are no longer the base case. The 10-year yield slipped to roughly 4.14%, down from the 4.40% plus levels seen in June. This has some mixed implications for banks like JPMorgan.
Net Interest Income: Lower rates could narrow the spread between what banks earn on loans and pay on deposits, potentially compressing Net Interest Income (NII), which was a major tailwind in a high-rate environment. However, JPM’s preliminary view for 2026 net interest income (excluding markets) suggests it could reach $95 billion, indicating confidence in maintaining strong lending profitability.
Investment Banking Boost: The less-hawkish stance, along with falling yields and a more stable outlook, is generally highly supportive of the Investment Banking business. Easing credit costs and increased market confidence typically encourage companies to move forward with mergers and acquisition activity, IPOs, and debt issuances, which directly benefits JPM’s investment banking division.
Credit Quality: With the Fed easing, a softer landing looks more likely. That should help consumers and may slow the increase in credit losses the bank had been preparing for. Even so, management says consumers are still in a weaker position than they were a year ago.
Rising Expenses Are A Key Concern
Despite strong operating performance, the company is signaling a step-up in its expense base for next year. Total expenses for 2026 are now projected at about $105 billion, compared with consensus closer to $100 billion. Management attributes the higher outlook to strategic, growth-focused spending, including:
- Higher compensation and volume-driven costs, particularly tied to credit card growth.
- Stepped-up investments in technology and Artificial Intelligence (AI).
- Ongoing expansion of the physical branch network.
This news led to a notable stock drop, reflecting investor concern over cost control versus the benefit of growth investments.
So, is the stock too expensive?
Depends on how you look at it.
At about $310/share, JPM trades at roughly 2.9× tangible book value, which is a premium multiple relative to peers. While this makes the bank expensive versus peers, this could be partly justified by a strong capital position, higher credit quality, and proactive risk management, which could make it better positioned to thrive in the current environment. And the return story is real, with strong share repurchases and a recent 7% dividend increase. That said, our internal valuation lands at about $280/share, a notch below the market—suggesting the stock is priced for perfection in the near term. See our analysis of JPMorgan Valuation: Expensive or Cheap for more details on what’s driving the stock.
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