For a year, Wall Street’s dominant theme has been the so-called K-shaped economy, in which the well-to-do have powered financial activity despite lower earners’ struggles.
This week, the nation’s largest banks reported a broadly disappointing set of quarterly earnings, marking the first stumble after a yearlong spree of rising markets and softening regulations paid off handsomely for the finance set.
Results at Bank of America, Citi, JPMorgan Chase and Wells Fargo all fell short of expectations and their shares fell. Troubles ranged from delayed merger deals (JPMorgan) to stubborn expenses (Citi) to questions about the efficacy of artificial intelligence tools (Bank of America). Banks that do business largely with rich individuals and corporations, such as Goldman Sachs and Morgan Stanley, fared comparatively better.
Results from major lenders are closely watched because they contain hints about the state of the economy and ordinary American consumers.
Wells Fargo’s chief executive, Charles Scharf, said his organization had not seen a “meaningful” shift among the customer data it collects, including checking account flows, direct deposit amounts, overdraft activity and payments. Another Wells Fargo executive described “very consistent activity.”
Wells Fargo’s quarterly results disappointed for a different reason: Lower-than-expected profits, in part because mortgage lending stayed weak in a slow housing market. The bank’s stock saw its steepest fall in six months.
CNBC:
Close to a zero chance that Jerome Powell cuts interest rates as he exits in May.
Fed futures have a rate cut in April at a third.
Get used to a bunch of boring FOMC meetings ahead. pic.twitter.com/usHIRoyKaD
— QE Infinity (@StealthQE4) January 15, 2026