Capital Markets Bounce Back: What This Means for JPMorgan's Prospects
After a slowdown in 2022 and 2023 due to geopolitical tensions, recession fears and inflationary pressures, the capital markets staged a notable rebound last year. JPMorgan's investment banking (IB) fees within the CIB surged 36% year over year, reflecting improved underwriting volumes and advisory mandates, while markets revenues rose 7% on elevated volatility and trading demand. Importantly, the bank retained its #1 position in global IB fees, underscoring its competitive strength and client franchise depth even in challenging conditions.
While early 2025 saw mixed sentiment, with optimism tempered by tariff-driven policy shocks, deal-making has regained momentum. JPMorgan captured an 8.9% IB wallet share in the first half of 2025, with IB fee growth expected to continue at a steady pace. This sustained uptrend in IB fees should provide a stable growth anchor for the CIB segment, as corporates re-enter equity and debt markets for capital raising and strategic transactions.
On the trading side, markets revenues have historically been more volatile, swinging with macro uncertainty and client risk appetite. Hence, heightened geopolitical tensions, tariff-related uncertainty and episodic volatility in 2025 have spurred client hedging and trading needs, supporting revenue growth in the first half of the year. While structural normalization in trading activity is inevitable over time, JPMorgan's broad product coverage across fixed income, currencies, commodities and equities positions it to capture upside during volatility spikes.
The revival of capital markets provides JPMorgan with a dual tailwind: a steady lift from the recovery in deal-making and opportunistic boosts from trading in periods of market dislocation. Given its leading market share, diversified capabilities and global reach, the bank is well-positioned to translate this cyclical upswing into sustained earnings momentum over time.
How JPMorgan Stacks Up Against Peers in Capital Markets
Similar to JPM, Bank of America BAC witnessed subdued IB performance in 2022 and 2023, with revival happening last year. In 2024, the company's IB fees soared 31% year over year. Then, in the first six months of 2025, Bank of America's IB fees declined on a year-over-year basis on muted industry-wide trends.
Coming to the trading business, Bank of America's sales and trading revenues have been increasing since 2022 (the metric increased 13% year over year in the first half of 2025). Yet, the volatile nature of the business and expectations that it will gradually normalize toward the pre-pandemic level are likely to make growth in the same challenging.
Another key peer, Morgan Stanley MS, leans heavily on the IB business to sustain profitability, with IB revenues jumping 36% last year after plunging in 2023 and 2022. But performance of the company's IB business has been subdued this year, with the metric rising just 1% from the prior-year quarter. Nonetheless, Morgan Stanley remains cautiously optimistic about the performance of the IB business, supported by a stable and diversified M&A pipeline.
Also, Morgan Stanley's trading business performance has been stellar over the past several quarters, attributable to uncertainty surrounding the tariff plans and macroeconomic headwinds. As market volatility and client activity are expected to remain decent, the company's trading business will likely continue to grow.
JPMorgan's Price Performance, Valuation and Estimates
JPMorgan's shares have soared 21.2% this year, outperforming the S&P 500 Index's gain of 9.5%.
From a valuation standpoint, JPM trades at a 12-month trailing price-to-tangible book (P/TB) of 2.98X, above the industry average.
P/TB Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for JPMorgan's 2025 earnings implies a decline of 1.3% on a year-over-year basis, while 2026 earnings are expected to grow at a rate of 4.5%. In the past week, earnings estimates for 2025 and 2026 have moved marginally upward.
Earnings Estimates
Image Source: Zacks Investment Research
JPM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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