Bank Earnings Unveil Stock Swings and Consumer Toll Amid Rising Rates

Options traders are anticipating larger-than-usual post-earnings stock price swings for several U.S. banks, including JPMorgan, Wells Fargo, and Citigroup, despite a decrease in overall market volatility. Analysts predict higher third-quarter profits for consumer lenders but a dealmaking slump for investment banks. Traders expect Wells Fargo's shares to move about 4% in either direction, compared to a median move of 2.6% over the past eight quarters. Similar expectations for larger post-earnings swings are seen for Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup. The increased volatility reflects risk aversion in the market, with investors concerned about elevated interest rates and stricter regulations.