Financial Stocks Today: JPMorgan Shock, Fed Rate Cut Hopes and Crypto Green Light Shape the Sector

Financial stocks are center stage this week as Wall Street digests a surprise expense warning from JPMorgan, a potential “hawkish” Federal Reserve rate cut, and a landmark decision that lets U.S. banks fully embrace crypto services. Together, these catalysts are setting the tone for how bank and broader financial stocks could trade after the closing bell on December 10, 2025.

Below is a same‑day roundup of the key news, forecasts, and analysis investors are watching right now.

1. Wall Street Pauses Ahead of a High‑Stakes Fed Decision

By late morning Wednesday, U.S. stocks were essentially treading water as investors waited for the Fed’s December decision. The Dow was up about 0.06%, the S&P 500 was roughly flat, and the Nasdaq was down around 0.2%, according to a mid‑session market wrap from Reuters. ^[1]

Traders are pricing in roughly a 90% chance of a 25‑basis‑point rate cut at 2 p.m. ET, but the bigger question is how aggressively the Fed will guide for 2026 and beyond. Strategists quoted by Reuters expect a “hawkish cut” scenario: the Fed trims rates now but signals only limited additional easing in 2026 and none thereafter, as it tries to support the labor market without reigniting inflation. ^[2]

A separate daily note from CaixaBank Research highlights why the Fed’s tone matters so much for banks. Yesterday’s JOLTS report showed U.S. job openings increasing in October, suggesting the labor market is cooling only gradually. That pushed Treasury yields higher and strengthened the dollar, raising the risk the Fed leans hawkish even as it cuts. ^[3]

For financial stocks, the Fed’s message is critical:

Net interest margins (NIMs) depend on both the level and slope of the yield curve.
Credit quality is tied to how much economic growth the Fed is willing to sacrifice to keep inflation in check.
Trading and investment banking revenues are sensitive to volatility and capital‑markets activity, which can swing sharply around Fed meetings.

As of midday, none of that was resolved yet. Today’s closing prices and any after‑hours moves will be heavily shaped by the post‑decision press conference.

2. JPMorgan’s $105 Billion Expense Shock Still Echoes Through Big Bank Stocks

The single most important stock‑specific story for financials right now is JPMorgan Chase.

On Tuesday, JPMorgan’s consumer and community banking chief Marianne Lake told investors the bank now expects 2026 expenses of about $105 billion — above both the average Wall Street forecast (around $101 billion) and even the most bullish prior estimate. ^[4]

At the same conference, she described the U.S. consumer environment as “a bit more fragile” and projected credit card charge‑offs around 3.3% in 2025, implying a normalization of credit losses from unusually benign post‑pandemic levels. ^[5]

The market’s reaction was swift:

JPMorgan stock fell roughly 4.5–4.7% on Tuesday, its sharpest drop in months.
The S&P bank index, which had been up about 1% intraday, closed down around 2%, making financials a clear drag on the S&P 500. ^[6]

The sell‑off came despite some positives in the guidance: Lake said the bank expects low‑single‑digit growth in Q4 2025 investment‑banking fees and low‑teens growth in markets revenue compared with a year earlier, reflecting solid trading and capital‑markets activity. ^[7]

By late Wednesday morning, JPMorgan shares had stabilized, with Reuters noting that the stock was holding steady after the prior session’s near‑5% plunge. ^[8] But the earnings narrative has clearly shifted from “operating leverage and buybacks” to “higher structural costs and more fragile consumers” — a mix that investors will continue to digest after the bell.

From an analyst perspective:

Morgan Stanley has already trimmed its JPMorgan price target from $338 to $331 but kept an “Equal‑weight” rating.
Aggregate analyst data still point to a “Buy” consensus and an average 12‑month target a bit above the current price, suggesting the Street sees Tuesday’s move more as a valuation reset than a collapse in the thesis. TechStock²

The key question for financial‑stock investors tonight and in coming sessions: Does the JPMorgan shock remain a company‑specific story, or does it force a broader rethink of big‑bank cost structures and returns on equity?

3. Crypto Green Light: New Rules Open a Fresh Revenue Stream for Banks

While JPMorgan’s expense news is a headwind, U.S. banks also received a major potential tailwind this morning: a regulatory green light for crypto activities.

According to a Benzinga report, U.S. banking regulators have withdrawn prior guidance that effectively discouraged banks from offering crypto‑asset and dollar‑token services. Banks can now custody digital assets, facilitate crypto transactions and build blockchain‑based products with far more clarity and less fear of regulatory pushback. ^[9]

For financial stocks, this opens several possible revenue levers:

Custody fees for institutional crypto holdings.
Trading and execution revenues from integrated platforms that combine traditional securities with digital assets.
New lending and yield products, such as crypto‑backed loans or tokenized‑asset accounts.

The article highlights JPMorgan, Bank of America and Wells Fargo as particularly well‑positioned given their existing blockchain pilots and digital‑asset research. ^[10]

In the near term, the news is more thematic than immediately accretive – banks still need to build and market products, and customers must adopt them. But after the bell, investors will be listening closely on earnings calls and at conferences for any hints of:

Timelines for rolling out crypto services;
The scale of potential balance‑sheet or fee‑income contributions;
Risk‑management frameworks, especially around custody and cybersecurity.

For financial‑sector bulls, the combination of new fee opportunities and clearer rules of the road is a rare piece of unequivocally positive regulatory news.

4. Sentiment and Fundamentals: Why Financial Stocks Still Look Undervalued

Even before this week’s news, several datasets suggested that financial stocks might be lagging their underlying fundamentals — a point that matters for anyone thinking about positioning after today’s close.

A new S&P Global Investment Manager Index (IMI) report released this morning shows: ^[11]

U.S. equity risk appetite is at a one‑year high, with the IMI Risk Appetite Index rising to +34% in December from +18% in November.
Financials, healthcare and communication services are now among the most favored sectors among institutional investors.
However, the S&P 500 financial sector index has underperformed the U.S. Financial Services PMI, meaning financial stocks have lagged the strength indicated by sector‑level activity surveys.

S&P’s economists interpret that divergence as a sign that financials may have room to catch up, reinforcing the bullish sentiment around the sector. ^[12]

Zacks’ latest industry work on major regional banks paints a similar picture. Over the past year, stocks in that group rose about 9.6%, underperforming both the S&P 500 (+14.6%) and the broader finance sector (+11.3%). Yet earnings estimates for the industry have been revised higher, with 2025 EPS projections up 2.1% and 2026 estimates up 1% over the last year. ^[13]

Valuation metrics also look supportive:

The industry’s price‑to‑tangible‑book (P/TBV) ratio is about 2.5×, below its five‑year peak near 3.2× and at a discount to the finance sector average (~5.9×).
The overall S&P 500 trades at roughly 12.9× tangible book, making bank stocks look relatively cheap on this metric. ^[14]

If Fed policy produces a soft‑landing scenario — slower but positive growth, gently falling rates and manageable credit losses — these valuation and sentiment dynamics could set up financials for outperformance into 2026.

5. Stock Picks Under the Microscope: BNY Mellon and U.S. Bancorp

Within financials, analysts are not just focused on mega‑banks. A fresh Nasdaq/Zacks note published this morning singles out The Bank of New York Mellon (BK) and U.S. Bancorp (USB) as two regional‑bank names poised to benefit from the current backdrop. ^[15]

The Bank of New York Mellon (BK)

BK sits at the crossroads of custody, asset servicing and wealth management — businesses that are less loan‑cycle‑sensitive than traditional commercial banking. Zacks points to several positives: ^[16]

Net interest income (NII) remains supported by rates that are still well above 2020–2021 levels, even as the Fed cuts.
The bank is aggressively digitizing operations and launching new products, including a stablecoin reserves fund aimed at institutional users of digital assets.
Strategic acquisitions, such as the purchase of Archer Holdco (a technology‑enabled managed‑accounts platform), deepen BK’s footprint in wealth technology.

Consensus forecasts call for earnings growth of about 22% in 2025 and 10% in 2026, and the stock has already rallied roughly 50% this year. ^[17]

U.S. Bancorp (USB)

USB remains a classic regional‑bank story with a twist: a heavy focus on payments and partnerships.

The bank has expanded via acquisitions (including MUFG Union Bank’s core franchise) and fintech deals, such as integrating its Elan credit‑card program into Fiserv’s Credit Choice solution.
NII has been trending higher as loan and deposit growth resumes, and management expects stabilizing funding costs to support margins as rates drift lower.
Capital returns are robust: USB raised its quarterly dividend by 4% to $0.52 per share and has a $5 billion share‑repurchase program authorized. ^[18]

Wall Street is modeling EPS growth of ~14% in 2025 and 7% in 2026, with the stock up about 8% year‑to‑date. ^[19]

Both BK and USB carry Zacks Rank #2 (Buy), reflecting improving earnings revisions relative to peers. For investors looking beyond the headline drama around JPMorgan, these names illustrate how selectivity inside the financial sectorcan matter as much as the broad macro narrative.

6. Sector Exposure: How Investors Are Playing Financial Stocks

For many investors, the preferred way to position around financials ahead of and after the Fed decision is via sector and industry ETFs.

An overview from ETF.com notes that a handful of large funds dominate assets in the space, including: ^[20]

Financial Select Sector SPDR Fund (XLF) – the flagship S&P 500 financials ETF, heavy in mega‑cap banks, insurers and diversified financials.
Vanguard Financials Index Fund (VFH) – a broad, low‑cost fund covering financials across the market‑cap spectrum.
SPDR S&P Bank ETF (KBE) and SPDR S&P Regional Banking ETF (KRE) – equal‑weighted portfolios focused specifically on banks and regional banks, respectively.
iShares U.S. Financials ETF (IYF) and iShares U.S. Financial Services ETF (IYG) – funds that tilt toward diversified financial services, with the latter excluding real estate.

While the performance numbers in that ETF.com piece refer to an earlier post‑election rally, the structural differences between these funds remain relevant today: broad vs. bank‑only exposure, large‑cap vs. regional focus, and the presence or absence of REITs.

With the Fed decision looming and JPMorgan volatility in the mix, investors may use these ETFs after the bell to quickly rebalance:

Rotating between broad financials (XLF, VFH, IYF) and pure bank exposure (KBE, KRE) depending on how the yield curve reacts.
Scaling risk up or down without having to pick individual bank stocks.

Leveraged products like FAS or UYG also exist but, as ETF.com cautions, are better suited to short‑term traders given the compounding effects of daily rebalancing. ^[21]

7. What to Watch After the Closing Bell on December 10, 2025

Even though the U.S. session is still underway, investors are already lining up a checklist for tonight and the next few days. Key watchpoints include:

1. The Fed’s Dot Plot and Forward Guidance

Does the Fed deliver the widely expected 25‑bp cut — and how many cuts does it signal for 2026?
A more hawkish path (fewer future cuts, concern about persistent inflation) could keep long‑term yields elevated, pressuring bank valuations but supporting NIM in the near term. ^[22]
A dovish surprise (more cuts penciled in) might boost risk sentiment and support loan growth but compress margins faster.

2. Follow‑Through in JPMorgan and Big‑Bank Peers

Does JPMorgan continue to stabilize or resume its decline after the bell?
Are there sympathy moves in Bank of America, Citigroup, Wells Fargo and Goldman Sachs even without new stock‑specific news? If so, it could signal a broader recalibration of expectations for big‑bank expenses and profitability. ^[23]

3. Announcements on Crypto and Digital‑Asset Offerings

Now that crypto rules have been relaxed, watch for press releases or conference commentary from major banks outlining timelines for new products such as crypto custody, tokenized deposits, or digital‑asset trading for clients. ^[24]

4. Regional‑Bank Commentary and Credit Quality

Regional banks are leveraged to local economies and commercial real estate. Analysts will be watching their reserve builds, non‑performing loan trends and guidance even more closely now that JPMorgan has flagged a more fragile consumer backdrop. ^[25]

5. Volatility and Cross‑Asset Spillovers

Wall Street’s main volatility gauge, the VIX, is already at a one‑week high. ^[26]
A sharp post‑Fed move in yields, the dollar or credit spreads could trigger algorithmic flows in sector ETFs like XLF and KBE, amplifying price swings in financial stocks during the after‑hours session and into tomorrow’s open.

8. Bottom Line for Financial‑Stock Investors

As of December 10, 2025 — before the Fed’s announcement and before the closing bell — the setup for financial stocks looks like this:

Macro: A pivotal Fed decision that could cement the path of rates into 2026, with a real risk of a “hawkish cut.” ^[27]
Micro: A high‑profile cost shock at JPMorgan that’s forced investors to revisit assumptions about big‑bank operating leverage and consumer resilience. ^[28]
Regulation: A surprisingly positive shift allowing banks to build out crypto businesses, potentially opening new fee‑based revenue streams. ^[29]
Positioning and valuations: Institutional sentiment turning more bullish on financials even as the sector trades at a discount to fundamentals and to the broader market on tangible book value. ^[30]

For long‑term investors, that mix suggests a high‑volatility but potentially attractive entry point — especially in high‑quality franchises and well‑capitalized regional banks. For short‑term traders, the next 24–48 hours are likely to be dominated by Fed headlines, yield‑curve moves and ETF flows, all of which will ripple quickly through financial stocks after the bell.

This article is for informational purposes only and does not constitute investment advice. Always consider your own objectives, time horizon and risk tolerance before making any financial decisions.