3 Big Bank Stocks Are Spiking Higher -- but Things Could Get Very Interesting on Friday

The stock market was having a strong day on Tuesday, with the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) all higher by about 2% as of 12:15 p.m. ET.

However, the financial sector was one of the best-performing areas of the stock market. Megabank JPMorgan Chase (NYSE: JPM) was up by 4.2%, while both Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC) were both higher by about 3% for the day.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Why are the big banks climbing?

The big reason the stock market in general is higher is that investors seem optimistic tariff deals will be reached. President Trump posted on social media that he had a "great call" with South Korea, and that China wants to make a deal. This follows Treasury Secretary Scott Bessent reporting that 70 countries are prepared to begin tariff negotiations.

It's also important to mention that bank stocks were some of the hardest hit in the market downturn after Trump's initial tariff announcement last week. Even after today's rebound, all three bank stocks are down between 8.5% and 14% over the past week.

JPM data by YCharts

While banks aren't directly impacted by tariffs, they do depend on the health of the U.S. economy. If the tariffs lead to inflation and/or a U.S. recession, they could cause loan demand to fall and consumer default rates to spike higher, both of which would be bad for bank profits.

To be clear, no major tariff deals had been reached at the time of this writing, and the additional tariffs Trump announced are still set to take effect at midnight on April 9.

Bank earnings are on deck

JPMorgan Chase and Wells Fargo are set to report their first-quarter earnings on Friday, April 11, with Citigroup and most other major financial institutions to follow early next week.

There are a few things in particular to keep an eye on. For one thing, investors will be watching delinquency rates and charge-offs for clues about consumer health. Of course, the tariff announcement and subsequent market plunge happened after the first quarter ended, but there have been concerns that defaults could tick higher for a while.

In addition, it will be interesting to see how bank net interest margins are performing. The most recent Federal Reserve interest rate cut took place in December 2024, so the first quarter will be the first three-month period where the lower federal funds rate is reflected in the numbers.

In a nutshell, while these three bank stocks have been extremely volatile recently, we're about to get a closer look at how their businesses are actually performing.

Should you invest $1,000 in JPMorgan Chase right now?

Before you buy stock in JPMorgan Chase, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and JPMorgan Chase wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $578,035!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 5, 2025

Wells Fargo is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.