Should You Buy JPMorgan Chase Stock Before April 14?

Bank stocks are down this year. The KBW Nasdaq Bank Index, which tracks the performance of the largest U.S. banks, is down by roughly 9% year to date (YTD).

The largest U.S. bank, JPMorgan Chase (NYSE: JPM), has lagged the index, down roughly 10.6% YTD. It is an unusual place for JPMorgan Chase, as it has consistently outperformed its peers across most of the past two decades.

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There are a few factors to be aware of that are driving the underperformance. However, the stock is trading at a discount. So should you buy the stock before JPMorgan Chase reports first-quarter earnings on April 14?

Why is JPMorgan stock down?

One of the reasons that JPMorgan Chase, along with the other megabanks, has lagged the index is because of concerns about new capital requirements. The requirements call for banks with more than $250 billion in assets to increase their liquidity to navigate any shocks or downturns.

But earlier this month, Michelle Bowman, the Federal Reserve's vice chair for supervision, said federal regulators were planning to scale back the previous requirements and mandate just a small increase, similar to what banks in the U.K. face.

For perspective, according to Basel III requirements for bank capital adequacy, a minimum Tier 1 Capital Ratio at 6% was set, thereby requiring banks to maintain a stronger core capital base to better absorb financial shocks and enhance overall stability in the banking system.

That's an important adjustment because the former requirements would be stricter than what's faced overseas and could put U.S. banks at a disadvantage. Further, Bowman said regulators are negotiating a decrease in global systemically important bank (G-SIB) surcharges. Combined, these proposals would decrease the requirements for large banks, and that would alleviate some investor concerns.

There are other concerns to watch for, too. One is a $5 billion lawsuit filed by the Trump Administration against JPMorgan Chase for debanking President Donald Trump and related entities for what it views as political reasons following the January 2021 riots. JPMorgan Chase officials have said the suit has "no merit," but it has weighed on investor sentiment.

Further, JPMorgan Chase stock has dropped because of guidance that called for $105 billion in spending in 2026 -- 10% higher than 2025 and more than analysts anticipated. A lot of that is going to updating technology and integrating artificial intelligence (AI) systems across the company.

"We need to have the best tech in the world," CEO Jamie Dimon said on the earnings call. But higher AI spending has been a red flag for investors, who are skeptical of the returns it will generate.

Should you buy JPM stock before earnings?

Investors should be tuned in for news on the lawsuit, as well as commentary on the capital requirements when Q1 earnings are released on April 14. They should also look for more guidance on the additional spending proposed for 2026.

Right now, even with these questions, along with a struggling economy and a fuzzy interest rate picture, I'd certainly consider adding shares of JPMorgan Chase before earnings.

The stock is trading at a discount at 13 times forward earnings, and any time you can get a stock of this caliber at a low valuation, it's worth considering. JPMorgan Chase is built to navigate choppy markets with its fortress balance sheet, and it has plenty of capital to make AI investments in its future.

Analysts expect strong 19% earnings growth in the quarter, on average, so if thatʻs the case, it could get a post-earnings bounce.

JPMorgan Chase is an advertising partner of Motley Fool Money. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.