As U.S. banks prepare to report their third-quarter earnings, investor attention is focused on the potential for a soft landing in the economy, Federal Reserve rate cuts, and their impact on bank valuations.

Analysts at Bank of America remain cautiously optimistic about the outlook for bank stocks. They predict that a soft-landing scenario could trigger a rebound in customer activity, improve loan growth, and positively drive higher price-to-earnings (P/E) multiples for the sector. However, macro uncertainties, including Fed policy shifts and the upcoming U.S. elections, temper the enthusiasm.

Bank of America equity analyst...