Wall Street’s good times roll while the rest of the economy plods along

For everyday consumers, though, the big lenders’ reports presented a different picture: good, not great.

The four largest U.S. banks—JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup—and the investment banks Goldman Sachs and Morgan Stanley reported solid fourth-quarter earnings this week.

Aside from expected, one-time impacts to profits at JPMorgan and Citi, profits rose across the board. Business units that count big companies and well-heeled families as their clients performed well. Consumer-banking operations, though, told a slightly different story.

While core measures of credit quality, such as loan delinquencies, held up with little sign of deterioration, their steady results contrasted with blowout quarters from businesses that make their money on big bets, big deals, and big portfolios.

“As predicted, the capital markets are kicking in with well-capitalized corporates and higher-end consumers driving the economy forward," Morgan Stanley CEO Ted Pick said Thursday on a call to discuss earnings. The firm posted record wealth management revenue in 2025.

At Citi, which is more exposed to everyday consumers’ financial health, finance chief Mark Mason told analysts that Citi’s U.S. cards portfolios’ net credit losses and delinquencies were performing in-line with the bank’s expectations. On a separate call with reporters, Mason said consumers across income levels were showing signs of discernment.

“We obviously have a mix of consumers on the high end that have been quite resilient and doing well—and those that have more pressures on the lower-end from an income point of view," Mason said.

The results captured a piece of how the country’s K-shaped economy—in which fortunes may diverge meaningfully for higher- and lower-income earners—is playing out on Wall Street.

This year, analysts say wealth management and investment bank units should continue to benefit from a bull market for stocks, corporate clients’ pent-up dealmaking demand, and the Trump administration’s efforts to roll back regulations Wall Street has seen as burdensome.

“CEOs definitely believe that the art of the deal and scaled consolidation is possible now," Goldman Sachs CEO David Solomon said Thursday on a call with analysts, appearing to reference President Donald Trump’s 1987 book “Trump: The Art of the Deal."

Banks maintained buffers. Wells Fargo’s fourth-quarter provision for credit losses, for instance, rose from the third quarter. But at just over $1 billion, it wasn’t far removed from the provisions in the year-ago period.

“The economy and our customers remain resilient," Wells Fargo CEO Charlie Scharf said on a call with analysts, “but we continue to closely monitor our portfolios for signs of weakness."

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com and Andrew Welsch at andrew.welsch@barrons.com