Bank of America shares surged 1.5% after reporting earnings of 89 cents per share, beating consensus estimates of 86 cents. However, revenue of $26.61 billion fell short of the $26.72 billion Wall Street target, raising questions about net interest margin compression.
Goldman Sachs jumped 1.5% on stellar trading results, earning $10.91 per share versus expectations of $9.53. Revenue hit $14.58 billion, well above the $13.47 billion forecast, driven by robust equities trading performance. Morgan Stanley beat estimates but dipped 0.3% as investors took profits.
The banking rally builds on Tuesday’s strong results from JPMorgan Chase, Wells Fargo, and Citigroup, all of which topped earnings and revenue expectations.
Federal Reserve Faces Tariff-Driven Inflation Pressures
June’s Producer Price Index remained flat, defying economist expectations of a 0.2% increase. The benign wholesale inflation reading provided temporary relief after Tuesday’s concerning consumer price data.
However, President Trump’s escalating trade measures threaten to reignite price pressures. New 30% tariffs on Mexico and EU imports begin August 1, while a Jakarta trade deal includes 19% levies on Asian exports.
“Inflation has started a slow climb as signs of tariff-induced inflation are now evident within durable and nondurable imports,” warned RSM chief economist Joe Brusuelas. The key question remains whether cooling service and housing costs can offset rising goods prices.