Wells Fargo (WFC) Surges 2.25% on Regulatory Relief, Posts 11.39% Three-Day Rally on Strong Earnings

Wells Fargo (WFC) surged 2.25% on Wednesday, marking its third consecutive day of gains and pushing the stock higher by 11.39% over the past three days. The share price reached its highest level since October 2025, with an intraday gain of 3.44% as investor optimism grew around the bank’s strategic repositioning and regulatory developments.

The stock’s rally was fueled by the Federal Reserve’s decision to lift the $1.95 trillion asset cap imposed after the 2016 fake accounts scandal. This regulatory relief enabled the bank to expand its lending and investment activities, with total assets surpassing $2 trillion in Q3 2025. The removal of the cap signaled a shift from defensive operations to growth-focused strategies under CEO Charlie Scharf, restoring confidence in the institution’s long-term trajectory.

Financial results further supported the bullish momentum. Wells Fargo reported a net income of $5.59 billion in Q3 2025, exceeding estimates, driven by a 2% year-over-year increase in net interest income and a 9% rise in noninterest income. The bank’s Return on Tangible Common Equity climbed to 13.9%, reflecting improved profitability and disciplined risk management, including a 36% decline in credit loss provisions.

Strategic initiatives also played a critical role. The bank expanded its investment banking division, securing a record $840 million in fees and advising on major deals like the Union Pacific-Norfolk Southern merger. Loan growth accelerated, particularly in commercial and auto lending, while regulatory compliance progress—including closing seven consent orders—reduced lingering overhangs. These moves reinforced investor sentiment, with analysts noting the transition from risk mitigation to value creation.

Despite macroeconomic uncertainties, Wells Fargo’s ability to navigate a stable interest rate environment and maintain strong credit quality positioned it as a high-growth contender in the financial sector. While challenges remain, including residual regulatory scrutiny and competitive pressures, the bank’s recent performance underscores its renewed focus on scaling operations and capturing market share.