Mixed Q4 bank results split markets as wealth and trading outperform

Major U.S. banks and asset managers delivered a mixed set of fourth-quarter 2025 results that split Wall Street between firms tied to wealth and capital markets and broad-based lenders facing mortgage and expense headwinds. The reports, which helped kick off the U.S. earnings season, left investors parsing whether gains reflected durable fundamentals or short-term dealmaking windfalls.

Equity markets moved higher even as several big-bank stocks fell. The Dow Jones Industrial Average rose 292.81 points to 49,442.44, the S&P 500 gained 17.87 points to 6,944.47 and the Nasdaq Composite added 58.27 points to 23,530.02 on the day. At the same time, trading data showed Wells Fargo shares fell about 5%, while Bank of America and JPMorgan each declined roughly 4% amid investor disappointment. Citigroup, Bank of America and Wells Fargo were down about 5% at one point. By contrast, Goldman Sachs rose about 4.6% and Morgan Stanley gained roughly 5.8% after reporting stronger dealmaking-driven profits.

Bank of America’s wealth-management division emerged as a standout. The unit reported fourth-quarter net income of $1.4 billion, up 20% year over year, and held more than $2.2 trillion in assets under management, a 16% increase for the quarter. The bank said the wealth unit added roughly 21,300 net new client relationships during the year and produced total revenue above $6.6 billion, driven by higher asset-management fees. At the parent level, Bank of America reported net income of $7.6 billion and diluted earnings per share of $0.98, an 18% increase from a year earlier.

Results at broader lenders were more uneven. Wells Fargo reported quarterly net income of $5.4 billion, or $1.62 per diluted share, but its results were viewed as falling short of expectations, and the bank cited persistent mortgage lending weakness in a slow housing market. JPMorgan showed better revenue but lower-than-expected profits, leaving investors to weigh its underlying momentum. Citigroup largely topped estimates on several metrics but continued to contend with stubborn expenses and operational headwinds.

Investment banks and wealth-focused firms fared comparatively well as trading floors and deal activity picked up. Goldman Sachs and Morgan Stanley both reported quarterly profit rises tied to advisory and capital-markets activity, boosting their shares. Firms with strong ties to wealthy and corporate clients benefited from a flurry of dealmaking that offset weakness in other banking businesses.

Several cross-cutting themes emerged. Mortgage rates stayed above 6% through the quarter, keeping mortgage originations and homebuilding under pressure and disproportionately affecting banks with large retail-lending franchises. Costs and operational issues remained a drag at some institutions, and investor attention also turned to political and regulatory risks, including a presidential proposal to cap credit-card APRs at 10% for one year and scrutiny aimed at senior policymakers, which together added an overhang for lenders.

Analysts said the early results would help set the tone for a broader earnings season in which questions about loan demand, AI-driven efficiency gains, and regulatory developments would determine whether recent market gains proved sustainable. For now, the quarter underscored a bifurcated financial sector: wealth and capital-markets franchises buoyed some names, while mortgage and expense pressures left others vulnerable.