Banking Sector Q3 Earnings: Economic Bellwether Amid Shutdown
Jonathan Akosa
StaffWriter
The United States government shutdown September 30th, 2025. It was caused by the failure to pass a bill extending government services. Republicans in the senate needed 60 more votes to pass the government spending bill and the democrats took the opportunity to negotiate. They were demanding extensions of expiring tax credits to lower health insurance costs.
Government Paused Services
The government has stopped providing some services that are not deemed as important as others like the food assistance program, and feral funded institutions like the Smithsonian have been closed. Agencies like the Centers of Disease Control and Prevention (CDC) and National Institute of Health (NIH) have put workers on unpaid leave. Many flights have also been delayed due to the shortage of air traffic workers. Law enforcement, Immigration and Customs Enforcement (ICE), and hospital medical workers will operate normally.
The government suspended its economic data output which has created a lack of data. The data includes items like job data, inflation data, and retail data. This lack of available data puts investors and economists in a tough position. Without this data, it is much harder to assess the economy’s health and pick up on market trends.
Where the Banking Sector Comes In
With the lack of available data, Investors are looking to the Q3 banking sector earnings releases are set to come out the week of October 12th. The banks releasing their earnings include JP Morgan Chase, Goldman Sachs, Wells Fargo, and Citi Group on Tuesday. Bank of America and Morgan Stanley on Wednesday. While Charles Schwab, Bank of New York Mellon and US Bancorp release on Thursday and American Express, Truist Financial and State Street are scheduled for Friday.
If these banks continue to show signs of expected earnings growth, the market will continue to do well. “A lot of the bullishness is built around the expected earnings growth,” said Chuck Carlson (as quoted in Krouskopf,2025)- the chief executive officer at Horizon Investment Services. Investors are looking to see whether these big banks beat earnings or bust the guidance they release to try to predict market trends.
So far, we have seen the earnings for JP Morgan Chase, Goldman Sachs, Wells Fargo, Citi Group, Bank of America, and Morgan Stanley. Morgan Stanley outperformed the rest of the banks with a significant beat of around 34%. Citi Group followed with the second highest beat of around 17%. The earnings were a positive catalyst but some of the effects were influenced by political noise like tariff threats.
Investors have been affected by these earnings because a lot of these earning beats caused short-term rallies. Also, Banks like Bank of America and PNC that have large interest incomes could struggle if the Federal Reserve cuts rates like they are expected to which has negatively impacted their stocks.
The banking sector is relevant because it makes just over 13% of the S&P 500. Investors and economists have also been paying close attention to the S&P500 to get an idea of what the market will look like in the near future. With the lack of data available analysts are using any relevant data they can find.
Contact Jonathan at jonathan.akosa@student.shu.edu