JPMorgan, Citi, BofA and peers drive record $600 billion rally on Trump's deregulation

America’s six biggest banks have gained $600 billion in value this year, in a full-scale financial rally sparked by President Trump’s deregulation agenda and a clear comeback in investment banking.

According to S&P Global, the combined market cap of JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley now stands at $2.37 trillion, up from $1.77 trillion at the end of 2024. That’s a jump of more than a third, just in under 12 months.

Meanwhile, Europe’s top six banks are worth just $1 trillion together. That gap didn’t just show up out of nowhere. It’s the result of years of uneven rules.

But now, with Trump rolling back post-crisis regulation, US banks are finally shaking off the chains put on after 2008. And they’re sprinting past the broader S&P 500 for the second straight year.

Trump loosens rules while banks load up on excess capital

Back in 2008, the financial crisis brought rules that cut deep into profits.More capital, tighter lending, and stress tests made banks boring for investors. Not anymore.

Trump’s regulators have already started to allow higher leverage for the largest lenders. They’ve changed the annual stress test system that decides how much capital banks must hold. They’ve also scrapped guidance that limited risky lending.

“You cannot underestimate how important this regulatory change has been to the stock prices,” said Gerard Cassidy, banking analyst at RBC. “The profitability of the industry was severely reduced because of the financial crisis because the banks had to bring on much more capital, deservedly so.”

But with those rules now being scaled back, things are shifting. And the biggest players are ready. They already piled up cash expecting tougher rules under the Biden plan from 2023. Those rules, called the Basel III Endgame, are now expected to land much softer than first feared.

“They’re all sitting on excess capital because they already built it up based on the other proposal,” Cassidy added.

That capital is more than just safety net. It can now be used for buybacks, dividends, and growth. Banks don’t just want to hold capital anymore. They want to use it.

Shares explode as investment banking and trading surge back

Citigroup’s stock is up nearly 70% in 2025, the best performer of the six. The reason? A massive internal restructuring, with years of cost-cutting and simplification finally working. For the first time since 2018, Citi is now trading above the sum of its parts.

Goldman Sachs isn’t far behind, with a 60% stock gain this year. The return of big investment banking deals is helping. So is a massive trading boom. Goldman hit record highs in 2025. And many expect things to speed up in 2026.

Data from Crisil Coalition Greenwich shows banks are pulling in serious revenue. Equities trading is forecast to hit $92 billion, while fixed income trading could reach $163 billion, both numbers smashing past previous records.

Still, not everyone is sold on the current wave of deregulation. Senator Elizabeth Warren has raised concerns about how far the changes go and what risks banks may take on next. But investors aren’t showing fear.

“It’s a risk that may come up down the line,” said Saul Martinez, head of US financials equity research at HSBC. “But given how little bank balance sheets have grown, there’s the sense that there is room to take more risk.”

Martinez also added, “It almost feels a little too good to be true right now. The fundamental backdrop is good. I think the question is how much of it is priced in.”

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