Flygande bankvinster bäddar för en stark rapportsäsong

Wall Street set the table for a better-than-expected fourth-quarter earnings season following a series of upbeat outlooks from the country’s biggest banks that bode well for the wave of industrial, consumer, healthcare and tech reports expected over the coming weeks.

JPMorgan’s solid December-quarter update, which included a record outlook for net interest income over the whole of 2026, was somewhat clouded by President Donald Trump’s ambitions to cap credit card interest rates, but it nonetheless set the tone for the first week of the reporting season.

Wall Street’s six biggest banks generated a record $593 billion in revenue, with underlying profits rising 8% from the fourth quarter of 2024 to $157 billion.

The blowout numbers lifted LSEG’s forecast for financial-sector earnings growth to 9%, from a prior estimate of 6.8%, with the collective earnings for the broader S&P 500 now likely to rise by around 9% to around $602 billion.

CEO Jamie Dimon’s assessment of business and economic conditions, a typically dour exercise in detailing looming risks to the country’s prospects, was, for him, surprisingly sunny.

“The U.S. economy has remained resilient (and) while labor markets have softened, conditions do not appear to be worsening,” he told shareholders. “Meanwhile, consumers continue to spend, and businesses generally remain healthy.”

Bank of America, meanwhile, is forecasting above-consensus GDP growth of 2.8% for this year, thanks in part to fiscal tailwinds from Republican tax cuts and a dovish Federal Reserve.

It’s a solid backdrop from which to build on the rotation away from tech and into so-called real economy stocks over the final stretch of 2025.

Benchmark materials, energy, and healthcare sector ETFs have all notched double-digit percentage gains over the past three months, with industrials up 8.6%. That compares with a 2.3% advance in information technology and a meager 0.7% bump in communications services.

Those moves could be consolidated by a host of sector-specific earnings over this holiday-shortened week, with 3M, GE Aerospace, Freeport-McMoRan, and Halliburton all on deck. Other names reporting include Intel, Johnson & Johnson, Procter & Gamble, and Netflix.

All that said, tech will still undoubtedly drive the lion’s share of fourth-quarter earnings gains, and likely dictate the early-year performance of both the S&P 500 and the Nasdaq, the former of which hit a fresh all-time high of 6977 points last week.

Taiwan Semiconductor’s bullish near-term outlook, underscored by the $56 billion capital spending commitment the contract chip maker unveiled earlier this week, has injected new life into the artificial intelligence investment trade and reinvigorated the sector as a whole.

“We believe tech stocks will have a very strong fourth quarter earnings season led by Big Tech as the cloud stalwarts Microsoft, Alphabet, and Amazon had very robust AI enterprise demand,” Wedbush analyst Dan Ives said.

But Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, sees some vulnerabilities in the sector that give her cause for concern.

“Recent developments in U.S. foreign policy and the topic of Fed independence may raise the risk of another ‘Sell America’ trade reigniting,” she said. “That could hit growth stocks harder since the appeal of the AI trade was an important driver of global investment in U.S. equities in recent years.”

Calvasina is looking beyond tech to justify what she sees as an investor shift from growth stocks to value names, and her end-2026 price target of 7750 for the S&P 500. But that has to come first from an improving bottom line.

“I think a shift in EPS growth leadership back toward Value and the rest of the market is needed for it to stick,” she said.

Outlook statements from the wave of earnings reports expected over the next two weeks will crystallize that view. And profit forecasts for the three months ending in March suggest earnings growth from materials, tied in part to the historic rally in commodities, will rival levels in tech and financials.

David Waddell, CEO and chief investment strategist at Waddell & Associates, also sees an ongoing shift into non-tech stocks, but says that in some ways it underscores the sector’s focus on AI investments.

“If the promise of AI holds true, it will appear in economic productivity data,” he said, noting the blockbuster third-quarter readings published last week.

“High productivity levels could prove persistent, taking the U.S. economy, U.S. earnings and U.S. quality of life measures even higher,” he said. “The more investors believe in this continuing productivity boom, the more money investors will make as the superlative returns for the leading Mag 7 become the superlative returns for the lagging Rest.”