JPMorgan's expenditure expectations far exceeded expectations, a scene reminiscent of a similar scenario in 2022 when the bank's cost guidance also triggered a sharp drop in stock prices.

JPMorgan Chase expects spending to reach $105 billion in 2025, exceeding analysts' expectations and raising concerns about cost inflation in the banking industry. The bank's stock price fell 4.7% on Tuesday, the largest drop in eight months. The sharp decline of JPMorgan Chase has dragged down the entire financial sector, becoming the main drag on the Dow Jones Industrial Average.


This cost warning reminds investors of a similar situation in 2022, when JPMorgan's spending guidance also triggered a stock price crash and market turbulence. The Chief Financial Officer of the bank, Marianne Lake, stated at the Goldman Sachs conference that cost growth is mainly driven by "business volume and growth related expenses," strategic investments, and "structural effects of inflation.

Analysts warn that as the largest bank in the United States, JPMorgan Chase's increased spending may force other banks to follow suit and increase investments to maintain competitiveness, which could have a negative impact on the entire banking industry.

Expenditure expectations far exceed expectations, and the haze of 2022 reappears in the market

JPMorgan's 2025 spending forecast of $105 billion is not only higher than the average analyst expectation of $101.1 billion, but even exceeds the highest estimate in Bloomberg's research. This number is about 9% higher than analysts' expectations for expenses in 2025.

Lake stated that the consumer and community banking services she manages are "important driving factors" for cost growth, with consultant incentive compensation, product marketing, branch construction, and artificial intelligence investment being the main reasons for cost increases.

In the first nine months of this year, JPMorgan Chase's non interest expenses increased by 4% compared to the same period in 2024, indicating ongoing cost pressures.

Tuesday's market volatility is reminiscent of a similar event in 2022, when JPMorgan's cost guidance also led to a significant drop in stock prices. The subsequent market rebound forced CEO Jamie Damon and his team to hold an investor day event to provide more transparency on spending plans, ultimately calming shareholder sentiment.

Mike Mayo, an analyst at Wells Fargo, pointed out in a research report on Tuesday that although higher spending may help the largest US bank deepen its competitive advantage, it is a "negative factor" for the entire industry because "other banks may need to invest more funds in market share, and the impact will be transmitted downwards".

JPMorgan Chase became the worst performing stock in the KBW Bank Index on Tuesday, closing at $300.51.

The outlook for investment banking business is cautiously optimistic, and there are warning signals in the consumer environment

In terms of investment banking business, Lake expects investment banking fees to achieve a "low single digit" percentage growth in the fourth quarter of 2025 compared to the same period last year, lower than the 6.3% increase expected by analysts. The outlook for trading revenue is more optimistic, with Lake expected to achieve a "low double-digit" percentage growth, exceeding analysts' expectations. In the first nine months of this year, JPMorgan's investment banking fees increased by 11% and trading revenue surged by 20%.

Lake stated that the "animal spirit" initially sparked by Trump's election as president faded due to the announcement of tariff policies, but the demand for merger and acquisition transactions returned in the third quarter and continued into the last three months of this year.

Lake gave a cautious assessment of the US economic outlook. She stated that although consumers and small businesses appear healthy, the overall environment is more fragile.

The ability to withstand incremental pressure has declined, "Lake said." The cash buffer has normalized, and although inflation has decreased, the price level is still absolutely high

This statement casts a shadow over the market's optimistic expectations of consumer resilience and provides new considerations for the Federal Reserve's future monetary policy decisions.

JPMorgan's expenditure expectations far exceeded expectations, a scene reminiscent of a similar scenario in 2022 when the bank's cost guidance also triggered a sharp drop in stock prices.

JPMorgan Chase expects spending to reach $105 billion in 2025, exceeding analysts' expectations and raising concerns about cost inflation in the banking industry. The bank's stock price fell 4.7% on Tuesday, the largest drop in eight months. The sharp decline of JPMorgan Chase has dragged down the entire financial sector, becoming the main drag on the Dow Jones Industrial Average.


This cost warning reminds investors of a similar situation in 2022, when JPMorgan's spending guidance also triggered a stock price crash and market turbulence. The Chief Financial Officer of the bank, Marianne Lake, stated at the Goldman Sachs conference that cost growth is mainly driven by "business volume and growth related expenses," strategic investments, and "structural effects of inflation.

Analysts warn that as the largest bank in the United States, JPMorgan Chase's increased spending may force other banks to follow suit and increase investments to maintain competitiveness, which could have a negative impact on the entire banking industry.

Expenditure expectations far exceed expectations, and the haze of 2022 reappears in the market

JPMorgan's 2025 spending forecast of $105 billion is not only higher than the average analyst expectation of $101.1 billion, but even exceeds the highest estimate in Bloomberg's research. This number is about 9% higher than analysts' expectations for expenses in 2025.

Lake stated that the consumer and community banking services she manages are "important driving factors" for cost growth, with consultant incentive compensation, product marketing, branch construction, and artificial intelligence investment being the main reasons for cost increases.

In the first nine months of this year, JPMorgan Chase's non interest expenses increased by 4% compared to the same period in 2024, indicating ongoing cost pressures.

Tuesday's market volatility is reminiscent of a similar event in 2022, when JPMorgan's cost guidance also led to a significant drop in stock prices. The subsequent market rebound forced CEO Jamie Damon and his team to hold an investor day event to provide more transparency on spending plans, ultimately calming shareholder sentiment.

Mike Mayo, an analyst at Wells Fargo, pointed out in a research report on Tuesday that although higher spending may help the largest US bank deepen its competitive advantage, it is a "negative factor" for the entire industry because "other banks may need to invest more funds in market share, and the impact will be transmitted downwards".

JPMorgan Chase became the worst performing stock in the KBW Bank Index on Tuesday, closing at $300.51.

The outlook for investment banking business is cautiously optimistic, and there are warning signals in the consumer environment

In terms of investment banking business, Lake expects investment banking fees to achieve a "low single digit" percentage growth in the fourth quarter of 2025 compared to the same period last year, lower than the 6.3% increase expected by analysts. The outlook for trading revenue is more optimistic, with Lake expected to achieve a "low double-digit" percentage growth, exceeding analysts' expectations. In the first nine months of this year, JPMorgan's investment banking fees increased by 11% and trading revenue surged by 20%.

Lake stated that the "animal spirit" initially sparked by Trump's election as president faded due to the announcement of tariff policies, but the demand for merger and acquisition transactions returned in the third quarter and continued into the last three months of this year.

Lake gave a cautious assessment of the US economic outlook. She stated that although consumers and small businesses appear healthy, the overall environment is more fragile.

The ability to withstand incremental pressure has declined, "Lake said." The cash buffer has normalized, and although inflation has decreased, the price level is still absolutely high

This statement casts a shadow over the market's optimistic expectations of consumer resilience and provides new considerations for the Federal Reserve's future monetary policy decisions.