Wall Street's earnings season kicks off Tuesday with JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS), Citigroup Inc. (C) and Wells Fargo & Co. (WFC) reporting results. For investors in the SPDR Dow Jones Industrial Average ETF Trust (DIA), the first major bank reports could quickly test a portfolio exposure that is easy to overlook: nearly one-seventh of the ETF is concentrated in just two banks.

DIA, which tracks the 30-stock Dow Jones Industrial Average, has 26.31% of its portfolio allocated to financials. Goldman Sachs accounted for 10.23%, making it DIA's largest holding, while JPMorgan represented another 3.84%. Together, the two stocks made up 14.07% of the fund.

The exposure reflects the Dow's price-weighted methodology. Unlike market-cap-weighted indexes, the Dow assigns greater influence to stocks with higher nominal share prices, regardless of their companies' total market values. That helps explain why Goldman, rather than a much larger company by market capitalization, tops DIA's holdings.

Goldman's results could matter more for DIA

Goldman's results could matter more for DIA.

According to Investors Business Daily, FactSet forecasts the bank's Global Banking & Markets revenue rising more than 17% to $11.86 billion, supported by investment-banking fees, advisory activity, equity underwriting and trading.

However, trading trends and expenses remain key variables. Goldman CEO David Solomon said in September that non-compensation expenses could rise by more than $500 million sequentially in the third quarter, citing higher transaction costs, accelerated technology investments and charitable contributions. Moreover, management expects the fixed-income, currencies, and commodities (FICC) business to weaken in the third quarter, with Morningstar expecting a 12% sequential decline in investment banking revenue and an 11% sequential decline in FICC revenue.

JPMorgan Chase presents a stronger earnings-growth outlook. Analysts expect earnings to rise 17% to $5.93 per share on revenue of $51.23 billion. Consumer and Community Banking revenue is forecast to increase 6% to $20.66 billion, while Commercial and Investment Banking revenue is expected to climb nearly 12% to $22.24 billion. Asset and Wealth Management revenue is projected to jump 24% to $7.55 billion, and net interest income is expected to rise more than 11% to $26.86 billion.

For DIA, concentration creates a measurable earnings-day risk. Goldman's results carry greater direct portfolio sensitivity. Its 10.23% weighting means a 5% move in the stock would contribute approximately 0.51 percentage points to the ETF's return, compared with about 0.19 percentage points for the same move in JPMorgan, whose weighting is 3.84%, assuming other holdings remain unchanged. Investors will watch whether Goldman's trading performance and cost outlook, along with JPMorgan's lending and revenue trends, support the financial stocks underpinning the Dow-tracking ETF.

The Bottom Line

The timing adds urgency. The KBW Bank Index fell 13% from its August peak and declined 6% in the third quarter, Reuters reported, despite expectations for earnings growth at major U.S. banks.

Goldman's results and guidance could carry disproportionate weight for DIA, while JPMorgan's commentary on lending, credit quality, funding costs and investment banking could shape sentiment toward financials more broadly. Citigroup and Wells Fargo are not Dow constituents, but their results could influence the sector's reaction.

For DIA investors, Tuesday's reports offer an early test of whether bank earnings can stabilize financial stocks, or whether disappointing guidance could turn the ETF's concentrated exposure into a source of near-term weakness.