The primaries for the 2028 US presidential election are still a little less than two years away. In the meantime, Wall Street’s hosting its very own Super Tuesday.

Five of the six largest US banks — Bank of America, JPMorgan Chase, Wells Fargo, Goldman Sachs and Citigroup — will report their second-quarter earnings tomorrow. Morgan Stanley, the sole outlier of the bunch, will follow on Wednesday. Investors, economists, Wall Street and Main Street will get a top-to-bottom look at the US economy.

Volatility Payoff

In the past three months, unstable geopolitics and AI disruption helped maintain the state of heightened market volatility dating back to the Trump administration’s spring 2025 trade war. That has buoyed the fortunes of big banks, whose trading desks and advisory teams are more than happy to surf the resulting swings in equities and capital markets activity like they’re on permanent holiday in Bali.

Analysts expect the banks to carry momentum from the first quarter, when elevated stock trading fueled by the Iran war resulted in record-setting equities earnings on Wall Street. Forecasts suggest this will be the second-best quarter ever. SpaceX’s unprecedented megacap IPO, which added to the surge in equities trading and brought in roughly $500 million in underwriting fees for banks that advised on the listing, was another fortuitous factor. “It’s gung-ho, folks,” JPMorgan CEO Jamie Dimon told a conference in May. “M&A is like the best year we’ve had, I’ve forgotten in how many years. [Equity capital markets] is going to be huge this year.”

But banks operate cyclical businesses, and there’s no guarantee of how long these conditions will last. Investors will want to hear what executives have to say about credit quality, loan demand, capital returns and margins, all of which are vital signs of the Main Street economy that remains Wall Street’s bedrock. It looks somewhat supportive for now:

• Consumer spending and business investment have proven resilient enough to allow the Federal Reserve to hold interest rates steady and prioritize curbing inflation. Labor market growth has slowed, though, with payrolls up just 57,000 in June.
• For the first quarter, JPMorgan reported that average loans rose 11% and average deposits climbed 7%. Federal Reserve data released Friday implies the robust lending environment continued in the second quarter, especially in the commercial and industrial sectors.

Not Waiting Around: The KBW Nasdaq Bank Index is up 14% this year, better than the S&P 500’s 10.6% and reflecting favorable conditions for lenders. Most analysts expect the good times to continue, but brokerage Oppenheimer advised clients in a note last month that the expansion cycle may be approaching its end: “While the cycle may well go on for another 12 to 18 months or more, we’d rather not wait around for the warning signs to appear, and thus particularly in the case of the investment banks, we are more inclined to take the money and run.”

Bada bing, $BABA boom. Alibaba’s shares surged last week after an earnings update that turned the heads of investors already starting to rotate toward Chinese AI.

The climb, the Hong Kong-listed stock’s largest since September, created an updraft that buoyed rivals including Baidu, Tencent and JD.com. At the same time, US tech stocks had a rocky week, with the Nasdaq losing steam midweek before leveling out later. Nvidia’s $1 trillion wipeout saw the stock trading about 17% off its May record before bouncing back.

Alibaba’s applying a uniquely Chinese playbook in its efforts to win the world’s AI-ttention.

Qwen You Believe It?

Alibaba’s an “everything” company similar to Amazon. And while Alibaba’s e-commerce biz is lagging behind cheaper, homegrown rivals, its infrastructure is helping position it to lead the AI race. The company built vast networks of data centers to process customer data and expanded into cloud computing (similar to Amazon), giving it the technical groundwork needed to make and run an AI model.

Alibaba has also torn a page out of its e-comm playbook to gain AI market share:

• It’s using aggressive marketing, including spending $431 million this Lunar New Year on giveaways (picture: big red envelopes) to incentivize people to download its Qwen AI app. At the same time, the tokens needed to run Chinese AI models like Qwen cost significantly less than those of US rivals.
• The strategy worked. Qwen has become the world’s most downloaded AI model, and so many US firms are using Chinese models now that a House committee investigation is looking into the potential risk associated with US biz tango-ing with China’s tech. Lawmakers have sent letters to Cursor and Airbnb about their concerns. Beijing may be on board: Reuters reported that China is looking into restricting overseas access to its top AI models.

Second’s Best: China’s AI models are advancing rapidly despite restrictions on tech that’s needed to create top-tier chips (mainly, lithography). And even if Chinese companies struggle to rival leading US models technologically, their cheaper per-token prices could pull away enough users to hurt US dominance. But winning the war may mean losing a lot of moola. Alibaba’s AI efforts brought in $1.3 billion in the first quarter of this year, while the company plans to spend $55 billion on AI by the end of next year.

In the billionaire space race, Jeff Bezos is no longer flying solo.

His rocket company Blue Origin is taking outside funding for the first time in its quarter-century life, to the tune of $10 billion, DealBook reported last week. The Amazon founder himself is expected to contribute $2 billion, and asset manager Coatue Management is planning to hand over $4 billion. Another $4 billion is set to come from large institutional investors. The funding round finally gives Blue Origin a valuation: $130 billion.

Enough Space in Space?

Blue Origin’s price tag could make it easier for the company to pursue future financing opportunities since potential investors can compare it with other private companies. It also comes at a time when the commercial space market is heating up, the government keeps tapping both Blue Origin and its main rival SpaceX and AI is demanding more infrastructure, even in space.

The news of Blue Origin’s funding round landed just about a month after SpaceX’s record IPO raised nearly $86 billion. Good news for Bezos’ company may seem like bad news for Elon Musk’s, but that’s not necessarily true. SpaceX has a massive lead over Blue Origin in the space race, evidenced in part by the fact that it launches into orbit far more often and has its Starlink satellite service provider business. Investors will wonder, if Blue Origin is worth $130 billion, what SpaceX is really worth? A lot, it seems:

• William Blair increased its valuation for SpaceX’s rocket launch business to $546 billion from $300 billion, analyst Louie DiPalma wrote in a research note. He added that the business should be “at least triple” that of the combined valuations of Blue Origin, Rocket Lab and Firefly Aerospace, and that it’s “a full decade ahead of peers in terms of development.”
• Cathie Wood’s firm ARK Invest also bought more shares of SpaceX last week. The space company comprised 4.33% of the ARK Innovation ETF as of Friday, making it the sixth-largest holding.

Put to Use: The new funding certainly won’t go to waste. Analysts at consulting firm Capstone expect Blue Origin to spend roughly $4.8 billion this year and estimate it has spent $28 billion since inception, the Financial Times reported.