Investors entered 2025 with optimism for US banks, particularly after Donald Trump’s election, which sparked hopes for deregulation and favorable conditions for corporate mergers. However, the upcoming earnings season will test whether this optimism is warranted.

JPMorgan Chase, the largest bank in the US, is expected to report its fourth-quarter and full-year 2024 earnings on Wednesday. Analysts anticipate that JPMorgan will announce its second consecutive year of record profits, with a significant increase in fourth-quarter earnings compared to the same period last year.

Other major banks, including Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley, are also expected to show profit gains for 2024 and the fourth quarter. Nonetheless, there are concerns that profits might have declined in the fourth quarter compared to the third quarter.

Investors will be closely monitoring the banks’ projections for 2025, considering uncertainties around inflation, the US economy, and interest rates. The performance of these banks during this earnings season will be crucial in determining whether the initial optimism was justified.

How do you feel about the financial outlook for 2025?