JPMorgan Stock Sinks on Higher Expense Outlook. Other Banks May Have to Keep Up.

Comments from JPMorgan executive Marianne Lake about the bank’s expense outlook weighed on the firm’s shares on Tuesday. (Jin Lee/Bloomberg)

Key Points

• JPMorgan’s stock declined over 4% after its consumer banking chief projected 2026 firmwide expenses to be approximately $105 billion.
• The projected $105 billion in 2026 expenses is 3.6% higher than current Wall Street analyst estimates and 9% above 2025 estimates.
• Cost growth is attributed to volume and growth-related expenses, strategic investments, and the structural impact of inflation.

A top JPMorgan Chase executive said firmwide expenses would rise in 2026 thanks in large part to investing in growth initiatives and, to a lesser degree, the effects of inflation. The outlook sent the bank’s shares down 4.7% on Tuesday.

Marianne Lake, CEO of JPMorgan’s consumer and community bank, told investors at a Goldman Sachs conference that she now expects 2026 expenses of $105 billion. That is 3.6% higher than Wall Street’s estimates and 9% higher than expectations for full-year expenses in 2025, according to data compiled by FactSet.

Lake sought to reassure investors at the financial services conference by noting that the biggest driver of higher expenses is “high-quality” costs, reflecting growth investments.

That includes product-marketing costs, higher incentive-related compensation as advisors outperform, spending to improve credit card offerings, building branches, and investing in artificial intelligence technology, Lake said at the event in New York.

“We would do as much responsible strategic investment as we could profitably, and responsibly, do,” Lake said.

Mike Mayo, a widely followed bank analyst at Wells Fargo, said that the outlook “should reverberate” as other banks may be looking to up their own spend to stay competitive.

To a lesser extent, Lake said, her increased expectations stem from broader, structural effects of inflation such as higher real estate costs.

JPMorgan’s stock was the worst performer in the Dow Jones Industrial Average on Tuesday. The Dow fell 0.4% while the S&P 500 was flat.

Lake said, too, that consumers and small businesses remain healthy, as do spending trends and measures of credit quality such as charge-offs and delinquencies. But the labor market and demand for labor, specifically, are weakening, she said.

“It is true that consumer sentiment is quite low, and the absolute price levels are high,” she said.

Write to Janet H. Cho at janet.cho@dowjones.com and Rebecca Ungarino at rebecca.ungarino@barrons.com