Banks Had A Blockbuster Quarter. Jamie Dimon Says The Market Is 'close To As Good As It Gets.'

• Wall Street's big banks posted blockbuster second-quarter results, fueled by banking and trading.
• Jamie Dimon warned that conditions are "getting close to as good as it gets."
• Other execs cautioned that a slowdown in AI financing and geopolitical chaos could cool the momentum.

"Record." "Strong." "Best quarterly revenue in a decade."

Wall Street CEOs described their impressive second-quarter earnings in confident terms on Tuesday, as all five banks that reported results notched double-digit profits. The banks — JPMorgan, Goldman Sachs, Citi, Wells Fargo, and Bank of America — generally reported big gains in equities trading revenue and investment banking fees. Morgan Stanley, which is set to report on Wednesday, is also expected to have had a strong quarter.

Overall, the CEOs said that the economy had proved resilient and the deal pipeline robust, buoyed by the AI financing boom. Yet the banking leaders questioned whether the business conditions that helped create the blowout quarter would last — JPMorgan CEO Jamie Dimon said things are "getting close to as good as it gets."

"We're in a very healthy, active, exuberant market with very high prices and very high volumes, and we benefit from that. We just don't know how long it will continue," Dimon said in a call with analysts. "Could it get a lot better than this? It can get better, but how much better? I don't know."

The second quarter marked one of Wall Street's busiest stretches in years. Blockbuster deals, including SpaceX's IPO, helped the rebound in dealmaking. Trading desks benefited from volatile markets, driven by geopolitics and shifting sentiment around some AI stocks. Companies continued raising money to finance AI infrastructure and data centers, which banks have rushed to help with.

None of the CEOs predicted an immediate broad slowdown, but some warned that the boost from the AI buildout won't last forever. Goldman Sachs CEO David Solomon said that capital demands for AI will "ebb and flow," as is typical.

"Ultimately, you will have a recalibration, a reset, a drawdown, and then a further acceleration. That's what the path generally looks like," Solomon said.

As he sees it, the markets are still in the "early innings" of the AI buildout cycle, and earlier in the call said he couldn't predict whether a recalibration would come in the next six or eighteen months. Goldman, he said, is investing to support long-term growth.

Wall Street's hottest quarter may be hard to repeat

Jeremy Barnum, JPMorgan's chief financial officer, told journalists ahead of the bank's earnings call that "it would be naive not to be worried" about market exuberance, especially as it relates to AI. At the same time, though, he said that it's easy to worry, only to have the market keep doing well.

The caution also showed up in how executives talked about lending on analyst calls. Wells Fargo CEO Charlie Scharf said competitors were taking on risks his bank wouldn't touch. Barnum said JPMorgan had passed on some data-center financings because they didn't meet the bank's underwriting standards.

"We have a pretty precise framework to govern what we're willing to do and what we're not willing to do in that space across those types of risks. We saw some deals come through where we were just like, 'Yeah, we're not doing that,'" he said.

A veil of geopolitical uncertainty also hung over the calls. Bank of America CEO Brian Moynihan said that while he expects strong market conditions to persist, the war in Iran is complex.

"We can't predict what will happen next in it, and that could affect the market's perception, IPOs, et cetera," he said.

Citi CEO Jane Fraser echoed that the pipeline is healthy, but anticipated a "summer lull," especially given the upcoming midterm elections and the "wild card" of current geopolitics.

Others projected a summer slowdown as well, partly because it would simply be difficult to sustain this quarter's extraordinary momentum — as Barnum said, it seems statistically unlikely that the "particular combination of effects would repeat itself." Citi's CFO mentioned that markets revenue has historically declined in the second half of the year, and, given the current strength, "that decline could be greater this year."

Scharf summed up the basic sentiment fewer than 20 minutes into his bank's earnings call, before analysts even started firing questions: "Strong environments like this don't last forever."