A basket of major U.S. bank stocks, as measured by the Financial Select Sector SPDR Fund XLF, is poised to extend its record highs following a wave of strong third-quarter earnings reports.

The fund rose nearly 0.7% in premarket trading, continuing its upward momentum from last week’s rally. Gains also spilled over to regional banks, as SPDR S&P Regional Banking ETF KRE rose 0.5%.

On Tuesday, top financial firms including Goldman Sachs Inc. GS, Bank of America Corp. BAC, Citigroup Inc. C, and Charles Schwab Corp. SCHW all exceeded analyst expectations, reinforcing investor confidence in the sector’s health.

Goldman Sachs Q3 2024: Major Revenue Beat Drives Stock To Record Highs

Goldman Sachs posted a robust third-quarter performance, significantly beating Wall Street’s earnings estimates. The bank reported earnings per share (EPS) of $8.40, surpassing the expected $6.88. Revenue came in at $12.7 billion, topping the $11.7 billion consensus estimate, with standout results in several key segments.

• Equities sales & trading revenue surged to $3.5 billion, well above the $2.95 billion estimate.
• Global banking and markets net revenue hit $8.55 billion, beating the forecast of $7.65 billion.
• Total deposits grew 2.8% quarter-over-quarter to $445 billion.
• Assets under management (AUM) reached $3.1 trillion, exceeding expectations of $2.99 trillion.

Stock Reaction: Shares of Goldman Sachs jumped nearly 3% in premarket trading, reaching a new record high of $537.50.

Read also: Goldman Sachs Q3 Earnings: Investment Banking Fees Surges 20%, Asset & Wealth Management Up 16%, But Fixed Income Falters

Bank of America Q3 2024: Solid Growth in Investment Banking and Trading

Bank of America also delivered a strong set of earnings, with an EPS of $0.81, beating the $0.76 consensus. Revenue totaled $25.34 billion, slightly above expectations of $25.25 billion, driven by solid growth in its investment banking and trading operations.

• Net interest income (NII) rose to $13.97 billion, surpassing the $13.9 billion forecast.
• Investment banking revenue reached $1.4 billion, exceeding the $1.24 billion estimate.
• Trading revenue, excluding debt valuation adjustments, hit $4.94 billion, beating the $4.57 billion consensus.

Richard Ramsden, equity analyst at Goldman Sachs, indicated that Bank of America delivered “another well-rounded beat,” highlighting that NII was 0.5% above the Street due to higher earning assets, loans, and trading balances.

Stock Reaction: Bank of America shares climbed 2% to $42.79 following the earnings report.

Citigroup Q3 2024: Strong Gains in Trading and Wealth Management

Citigroup outpaced analyst expectations, reporting an EPS of $1.51, beating the consensus of $1.31. Revenue for the quarter came in at $20.32 billion, ahead of the $19.86 billion estimate.

• FICC sales & trading revenue reached $3.58 billion, in line with forecasts, while equities sales & trading revenue surged to $1.24 billion, far above the $1.03 billion estimate.
• Wealth management revenue was a bright spot, hitting $2 billion compared to the $1.8 billion forecast.
• Markets revenue totaled $4.82 billion, topping estimates of $4.6 billion.

Citi’s investment banking revenue also surpassed expectations, coming in at $934 million versus the anticipated $874.5 million. This marks a solid quarter for Citigroup as it continues to streamline operations while growing its core business lines.

Stock Reaction: Citigroup shares rose 2.4% to $67.50, reaching levels not seen since mid-July.

Charles Schwab Q3 2024: Shares Skyrocket On Earnings Beat

Charles Schwab also joined the list of financial firms delivering upbeat Q3 results. The company reported an EPS of $0.77, exceeding the $0.75 consensus, with revenue of $4.847 billion, just above the $4.786 billion estimate.

This marks a strong recovery for Schwab, which faced pressure earlier this year. The bank benefited from steady client engagement and favorable market conditions.

Stock Reaction: Charles Schwab shares rocketed 9% to $73.78 in premarket trading, putting the stock on track for its best session since July 2023.

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Image created using artificial intelligence via Midjourney.