JPMorgan Stock Slides on Warning of Steep 2026 Expense Growth

Core Insights - JPMorgan's shares fell 4.7% after CEO Marianne Lake announced at the Goldman Sachs 2025 U.S. Financial Services Conference that total expenses are expected to rise by over $9 billion to $105 billion in 2026 [1][9] Expense Drivers - The increase in expenses will primarily stem from growth and volume-related spending, including compensation, branching/expansion costs, and credit card business growth, as well as investments in technology and artificial intelligence [2][9] - Structural inflation costs, such as higher real estate and general operating overhead expenses, will also contribute to the overall rise in expenses [2] Strategic Spending - JPMorgan views the anticipated spending as purposeful, aimed at supporting growth and long-term positioning rather than merely escalating costs [3] Branch Expansion Plans - Despite the rise of mobile and online banking, JPMorgan is expanding its physical presence by opening 14 new J.P. Morgan Financial Centers and plans to establish over 500 new branches by 2027, with 150 already built in 2024 [4] - The company is also committed to renovating 1,700 existing locations by 2027 and expanding its digital bank, Chase, across the European Union, including a planned launch in Germany by mid-2026 [5] Market Outlook - While the consumer and small-business segments are not expected to collapse, they are viewed as more vulnerable than in previous years, with a forecast of rising unemployment impacting consumption [6][7] - Despite concerns over expenses, JPMorgan's capital markets business is expected to see investment banking fees increase in the low-single digits in Q4 2025, with market revenues projected to rise in the low teens [7] Stock Performance - Over the past six months, JPMorgan shares have increased by 12.1%, compared to a 23% growth in the industry [8]