Bank earnings show hints of trouble

Trump's threatened cap on credit card rates looms large over earnings reports by biggest US banks

- ROB COPELAND

People walk past the New York Stock Exchange on Monday. Big bank stocks are up strongly over the past 12 months, even after the recent stumble.

For a year, Wall Street’s dominant theme has been the so-called K-shaped economy, in which the well-to-do have powered financial activity despite lower earners’ struggles.

This week, the nation’s largest banks reported a broadly disappointing set of quarterly earnings, marking the first stumble after a yearlong spree of rising markets and softening regulations paid off handsomely for the finance set.

Results at Bank of America, Citi, JPMorgan Chase and Wells Fargo all fell short of expectations and their shares fell. Troubles ranged from delayed merger deals (JPMorgan) to stubborn expenses (Citi) to questions about the efficacy of artificial intelligence tools (Bank of America). Banks that do business largely with rich individuals and corporations, such as Goldman Sachs and Morgan Stanley, fared comparatively better.

Results from major lenders are closely watched because they contain hints about the state of the economy and ordinary American consumers.