Wall Street reaps massive gains as the election frenzy fuels a trading frenzy; JPMorgan (JPM.US) profit surges 50% in Q4.

Thanks to the market volatility caused by the U.S. election last November, traders at JPMorgan Chase (JPM.US) have made significant profits.

The largest U.S. bank reported fourth-quarter net profit of $14 billion, up 50% from $9.3 billion a year earlier; and earnings per share of $4.81, up from $3.04 a year earlier.

Trading revenue at JPMorgan rose 21% year-on-year to $7.05 billion in the fourth quarter. Fixed-income trading revenue rose 20% year-on-year, while stock trading revenue grew 22%.

Optimistic forecasts for the fourth-quarter trading revenue of the five largest U.S. banks in 2024 rose to $24.5 billion, the highest in at least five years, as investors bet on the U.S. election and Trump administration policies.

The bank also reported that its investment banking revenue grew 49% year-on-year to $2.48 billion in the fourth quarter. Consulting and equity underwriting revenue both beat expectations, but bond underwriting revenue fell short.

Net interest income fell 3% year-on-year to $23.4 billion in the fourth quarter, but still beat expectations. JPMorgan expects net interest income this year to be about $94 billion, up from analysts' previous expectations of $89.8 billion.

According to the earnings report, JPMorgan's profit in 2024 rose to a record $58.5 billion from $49.6 billion a year earlier.

JPMorgan CEO Jamie Dimon said in a statement on Wednesday that the U.S. economy has been resilient due to low unemployment and healthy consumer spending. "However, two risks remain. The current and future spending demand may cause inflation, so inflation may last for a while. In addition, geopolitical situations are the most dangerous and complex since World War II."

Other large banks, including Goldman, Citigroup and Wells Fargo, also reported earnings on Wednesday. Investors were most concerned about the impact of the Fed's rate cut and the U.S. election on trading, as well as the views of executives on interest rates and trading prospects.

After the earnings report, JPMorgan rose 2.2% before the market opened. The stock has risen 46% in the past 12 months.