Q3 earnings season started off with negative news from two small regional lenders filing for bankruptcy. JPMorgan Chase CEO Jamie Dimon warned of private credit risks, but big banks like JPM, BAC, MS, WFC, C, and GS reported strong Q3 results, outperforming the market and posting impressive YTD gains. Investment banking and trading revenues surged due to increased M&A and IPO activity.

Global M&A activity hit a decade high, with North America leading the way. Big banks like JPMorgan Chase, Bank of America, and Wells Fargo saw significant increases in trading and investment banking revenues. While the big banks performed well in Q3, the Financial Select Sector SPDR Fund (XLF) offers broad exposure to the financials sector, and its institutional ownership stands at nearly 73%.

For investors seeking financial exposure, the XLF could be a good option as big banks continue to perform well. Analysts are bullish on Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo, with average 12-month price targets indicating potential upside. MarketBeat tracks top analysts’ stock recommendations daily and has identified five top stocks analysts are recommending to buy now.

Read more at Nasdaq: Big Banks Are Setting the Tone as Earnings Season Kicks Off