JPMorgan (JPM) stock fell 4.65% on Tuesday after executive Marianne Lake warned that costs at the bank would rise in 2026 as competition in the credit card space and investments in AI drive higher spending at the firm.
The stock’s slide made JPMorgan the biggest loser in the Dow Jones Industrial Average (^DJI) on Tuesday. It was the bank’s largest one day decline since April 4.
Lake, CEO of the bank’s consumer and community banking division, said at a conference in New York that the bank expects to realize $105 billion in expenses next year.
In October, JPMorgan CFO Jeremy Barnum told analysts that consensus estimates for $100 billion in costs in 2026 were “a little bit low.” The firm was on track for expenses to total $96 billion in 2025 through the third quarter.
“We feel really great about the expenses, not just how we’re investing the money but also in the context of the performance of the business,” Lake said.
The bank’s biggest bucket for expense growth will be costs related to “growth and volume,” including compensation and credit card marketing within the consumer bank, followed by “strategic investments,” such as its brick-and-mortar branches and artificial intelligence, Lake said.
Finally, Lake said the bank also anticipates the “structural consequence of inflation,” along with real estate, to drive its costs higher.
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Big spending isn’t new for JPMorgan. CEO Jamie Dimon has consistently argued that longer-term strategic investments should be viewed as an investment, rather than an expense. The firm is on track to spend $18 billion this year on technology alone, for instance.
Earlier this year, the bank opened its massive state-of-the-art new headquarters in midtown Manhattan. It plans to open a massive new London headquarters that is expected to take about six years to construct.
Regarding US consumers and small businesses, Lake said those customers still look resilient, but after three years of drawing on their pandemic-era cash buffers, their spending capacity is running thin.
“I would characterize the environment as being a little bit more fragile,” she said, noting that JPMorgan expects unemployment to “grind a little higher” next year.
The bank, which recently lowered its expectations for its credit card charge-off this year to a rate of 3.3% in its portfolio, projects charge-offs to rise in 2026 to 3.6% or lower, according to Lake.
Lake said JPMorgan’s investment banking fees in the fourth quarter are on pace to increase by “low single digits” compared to the year-ago period, while its markets business is expected to rise by “low teens” from the same period.
