Goldman Sachs posted a big beat and still fell. Citi dropped 5.6% and JPMorgan missed for a rare quarter

Bank earnings season opened on Tuesday with a result that summed up the mood on Wall Street. The bank with the best numbers did not rise, the bank that beat estimates fell the most, and the biggest lender in the country posted a rare miss while its chief executive warned about forces shifting "under the surface."

Goldman: a blowout that faded

Goldman Sachs earned $17.01 a share in the third quarter on revenue of $18.68 billion. Analysts had expected about $13.09 a share and $16.86 billion, according to Investing.com, while 24/7 Wall St. cited a $13.65 consensus. Either way, it was a large beat. Chief Executive David Solomon told analysts revenue was "the second highest in our history."

The engine was equities trading. Revenue in that business rose 72% from a year earlier to $6.44 billion, helped by prime brokerage and lending to hedge funds. Advisory fees reached a record of about $1.65 billion as completed mergers picked up. Goldman also raised its quarterly dividend 25% to $5.00 a share, and said earnings would have been about $18 a share excluding an accelerated charitable contribution.

The stock rose more than 3% before the opening bell. It did not hold. Goldman closed down about 0.2% at $891.91, according to Yahoo Finance.

JPMorgan: a rare miss

JPMorgan Chase reported net income of $15.3 billion, or $5.57 a share. Excluding $498 million of after-tax losses on investment securities, it earned $5.75 a share. Analysts surveyed by LSEG had expected $5.90, and revenue of $50.91 billion was a little short of the $51.22 billion forecast, CNBC reported. The stock turned positive before the open and closed down about 0.9% at $331.43.

The underlying business was not weak. Corporate and investment bank revenue rose 14%, consumer banking revenue rose 9%, and the asset and wealth management unit took in $263 billion of client money. The bank also said it reduced share repurchases during the quarter.

What drew attention was Jamie Dimon's outlook. In the earnings release, he said the economy "continued to be fueled by strong business investment and ongoing consumer spending," and then listed the risks.

"These forces may be manageable, but we remain prepared for a wide range of outcomes." - Jamie Dimon, JPMorgan Chase

The forces he named were large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions.

Citigroup: a beat, then the biggest drop

Citigroup earned $2.85 a share on $23.8 billion of revenue, ahead of the $2.65 consensus cited by Bloomberg, and Chief Executive Jane Fraser said it was the bank's best third-quarter revenue in a decade. Net income rose to $5.2 billion from $3.8 billion a year earlier.

The shares rose early, then reversed. Citi closed down about 5.6% at $124.53, the worst performance of the four. Reuters pointed to markets revenue, which rose from a year ago but fell sharply from the second quarter as equity trading cooled. On the call, management said it expects a typical seasonal decline in markets revenue in the fourth quarter of around 20%, "or possibly a bit more." Fraser also said the IPO market "continues to be a bit more selective."

Wells Fargo: revenue fell short

Wells Fargo earned $1.87 a share, slightly above the $1.84 estimate, but revenue of $21.87 billion missed the roughly $22.3 billion analysts expected. The stock closed down about 3.1% at $80.74.

What the split says

Put together, the four reports showed strong activity at the top of Wall Street and caution almost everywhere else. Trading desks had a busy quarter as rates and oil swung, and dealmaking picked up. But several banks said activity slowed late in the quarter as Treasury yields climbed to multi-decade highs in September, and some companies postponed planned IPOs.

Investors also had high expectations going in. Reuters noted that Citi's shares had outperformed the broader bank index this year, and Goldman rose about 10% after its previous report, according to Investing.com. A good quarter was not enough on its own.

More large banks report later this week, and Wednesday's consumer price report will shape the rate outlook that drives much of their lending and trading business.