Six Major U.S. Banks Face Earnings Test as Rates Stay Elevated

Six major U.S. banks are entering a closely watched earnings week as elevated interest rates, high Treasury yields and firm oil prices sharpen scrutiny of lending and funding conditions.

JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo are scheduled to report third-quarter results before the U.S. market opens on Tuesday. Bank of America and Morgan Stanley are scheduled to follow before Wednesday’s open.

Forecasts call for all six banks to post higher third-quarter earnings per share than a year earlier. Profit gains at some lenders are expected to approach 20%.

The results build on a key week for U.S. markets. Investors are looking beyond headline earnings growth to assess borrowing demand, deposit costs, capital-markets activity and bank asset quality.

Treasury yields are at multi-year highs, while oil prices remain elevated. Those conditions have increased attention on how higher borrowing costs are affecting U.S. companies and consumers.

Bank shares have also weakened ahead of the reports. The KBW bank index is down about 13% from its August closing high and fell 6% during the third quarter. The Invesco Bank ETF has declined more than 12% since reaching a record high Aug. 14.