Big banks are entering Q1 earnings season on less certain footing than in January
Wall Street’s biggest banks are riding into the first quarter earnings season on far less certain ground than where they began 2026. This coming week, their ability to churn out more profits will once again be put to the test.
The procession kicks off on Monday with Goldman Sachs (GS) reporting, followed by JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) going on Tuesday, and Bank of America (BAC) and Morgan Stanley (MS) rounding out the group on Wednesday.
Investors have humbled the stock prices of these major lenders over the past three months after bidding them to record highs late last year.
Worries ranging from a spillover of the private credit world’s shakeout to a raging US-Israeli war with Iran have loomed largest, spurring the Nasdaq KBW Bank Index (^BKX) to its worst first quarter performance since 2023’s mini banking crisis. That wider banking industry index is up 1% year to date,
Analysts expect quarterly earnings to look solid. Collective profits for these six big lenders are forecast to climb 5% compared to a year ago, according to data compiled by Bloomberg. These giants are also expected to post year-over-year rises across overall dealmaking and trading fees.
“There is some renewed optimism here and I think there is the expectation that results are going to be pretty good, but it’s certainly not as bullish as it was in January,” said HSBC analyst Saul Martinez, who covers US banks. “And that’s a healthier setup.”
Perhaps, more important than actual results will be what the bosses of major lenders say during earnings calls about their dealmaking outlook, exposure to private debt, and the general health of the US economy amid historically high oil prices.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
A year ago, amid implications of a sweeping rollout of the Trump administration’s tariffs, big bank bosses addressed a growing freeze in the deals market and worries of a US recession. Both proved temporary.
“What you’re a lot more worried about today is stagflation,” Bank of America analyst Ebrahim Poonawala told Yahoo Finance. “But the risk of a recession could rise if this war becomes something that creates an extended period of supply chain disruptions while oil goes even higher.”
Another major concern is negative spillover from the world of private credit. Earlier this year, investors began to worry about the exposure private debt funds hold in loans tied to software companies at risk of disruption from advances in artificial intelligence.
Meanwhile, a growing list of private fund giants, such as Apollo (APO), Blue Owl (OWL), BlackRock (BLK), Carlyle (CG), Morgan Stanley (MS) and others, have seen a wave of investor redemption requests in recent weeks, with most imposing 5% limits on how much investors can get back on a quarterly basis. (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)
