STORY: Profits slid at the biggest American banks in the third quarter as they braced for a weaker economy.

JPMorgan Chase, Morgan Stanley, Citigroup and Wells Fargo showed a slide in net income after turbulent markets and higher interest rates choked off investment banking activity and lenders set aside more rainy-day funds to cover losses from borrowers who fall behind on payments.

JPMorgan CEO Jamie Dimon said the bank was "hoping for the best" but remained "vigilant and are prepared for bad outcomes."

Tactical Income founder Jeff Tomasulo says it is consumers’ behavior that will decide if the banks’ future would be worse.

"The most interesting part that I think we should take away from this, and it's something that we have to watch, it is so critical, is the consumer. And we saw this in Citibank's earnings, right? You heard them talk about their credit cards and their products, right? Their lending products that have increased tremendously over the last quarter. And it's showing us, and we heard it out of JPMorgan, that the consumer is still spending money right now. Is that because wages are increasing, right? And they're not feeling this inflationary pressures that we've seen? But to me, I always said the really the last shoe to drop, and that could really put a dagger in the overall market and to a lot of these earnings”

Despite the drop in profits, shares of JP Morgan, Citi and Wells rose Friday as the banks managed to beat lowered expectations.

But not Morgan Stanley. Its stock slumped as it reported a 30% drop in profits - worse than expected.