Nasdaq Surges Over 100 Points Amid Wells Fargo's Strong Earnings Report

U.S. stocks traded mixed, with the Nasdaq gaining over 100 points on Tuesday. Wells Fargo reported better-than-expected Q2 adjusted EPS results, with a net interest income of $11.71 billion, down 2% YoY. The Dow traded down 0.57% to 44,204.33, while the S&P 500 rose 0.01% to 6,269.15. Leading sectors included information technology, while materials stocks dipped 0.9%.

Wells Fargo & Co. (WFC) reported its second-quarter 2025 earnings on Tuesday, with adjusted EPS of $1.60, beating the consensus estimate of $1.40. Revenue for the quarter came in at $20.82 billion, surpassing the consensus estimate of $20.76 billion. The stock closed at $83.43, up 28.93% in the last three months and 38.50% in the last 12 months [3].

The bank's net interest income was $11.71 billion, down 2% year-over-year, primarily due to lower interest rates on floating-rate assets and changes in the deposit mix [2]. This resulted in a 1.8% decrease in net interest income compared to expectations. The bank also reported a decline in net interest margin, falling to 2.68% from 2.75%, below the FactSet consensus of 2.71% [1].

Wells Fargo's stock (WFC) dropped 5% on Tuesday, putting it on track for its biggest one-day loss since March 10, when it fell 6% [1]. The Financial Select Sector SPDR ETF XLF was down 0.9%, while Citigroup Inc. (C) shares rose 3.3%, and JPMorgan Chase & Co. (JPM) lost 0.4% [1]. The bank's stock price has been volatile, with a 3.27% drop during the premarket session on Friday [2].

Wells Fargo's net income for the quarter rose 11.9% from the same period a year ago to $5.49 billion, while earnings per share increased to $1.60 from $1.33 [1]. Total revenue grew 0.6% to $20.82 billion, snapping a three-quarter streak of quarterly top-line misses. The bank's consumer and commercial banking, and wealth and investment management businesses offset a decline in corporate and investment banking [1].

The bank expects 2025 net interest income to be roughly in line with the 2024 income of $47.7 billion, compared to its previous guidance of about 1% to 3% growth [2]. This outlook was driven by lower net interest income in the Markets business, partially offset by higher noninterest income [2].

While Wells Fargo's Q2 results were mixed, the bank's stock performance has been strong, with a 38.50% increase in the last 12 months. However, the recent stock price drop highlights the challenges the bank continues to face in the current economic environment.

References:
[1] https://www.morningstar.com/news/marketwatch/2025071594/wells-fargo-snaps-streak-of-revenue-misses-but-the-stock-is-falling-heres-why
[2] https://www.benzinga.com/markets/earnings/25/07/46414749/wells-fargos-net-interest-income-shrinks-in-q2-bank-trims-outlook
[3] https://www.investing.com/news/earnings/wells-fargoco-earnings-beat-by-020-revenue-topped-estimates-4135172