JPMorgan Chase & Co. (NYSE: JPM) today reported better-than-expected second quarter results thanks to huge gains in investment banking and private equity investments.

Profit was $4.23 billion, or $1.20 per share, on revenue of $18.9 billion. The No. 2 investment bank was expected to earn $1.09 and post revenue of $17.62 billion, according to analysts surveyed by Thomson Financial. Knott Capital's Peter Schofield told Bloomberg News that, "JPMorgan is growing with deals, trading and investment banking everywhere."

Indeed, net income from investment banking was $1.18 billion, up 415 compared with the year-ago period, according to the New York-based company. Record fees helped by the surging stock market helped the business. Not surprisingly, profit fell 10% in its retail banking amid declines in regional banking and auto finance.

Though Chief Executive Jamie Dimon remains optimistic, he sounded cautionary note in the earnings press release, which helped push down the shares in pre-market trading:

Although we remain at a relatively benign point of the credit cycle, we continue to focus on being prepared for a less favorable environment. Given the diversity of our business mix, improving operating margins across our businesses and the strength of our balance sheet, the firm is well-positioned for the future.