Ahead of Wall Street bank reports: What to expect in the first quarter?

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•  12 Apr 2026
 

$JPM JPMorgan Chase enters earnings season as elevated market volatility drives financial activity, with the largest US banks expected to generate over $40 billion in combined trading revenue in Q1. The sector operates within Financials, competing with Goldman Sachs, Morgan Stanley, Citigroup, and Bank of America, all within major US indices.
The catalyst type is macro-driven volatility tied to geopolitical tensions and energy price swings. This setup reflects a trading revenue inflection and capital markets activity rebound. Analysts frame this as volatility monetization rather than directional risk-taking.

$GS Goldman Sachs and peers are expected to report more than $40 billion in aggregate trading revenue, marking the highest level in over a decade. The increase follows a return of volatility across equities, commodities, currencies, and oil markets after a relatively calm period. Geopolitical conflict in the Middle East alongside broader global tensions has driven sharp price movements, accelerating investor activity. This reflects a structural increase in client-driven trading volumes rather than proprietary positioning.

$MS Morgan Stanley benefits from volatility-driven demand for financial services, including hedging, portfolio adjustments, and short-term opportunity capture. These flows translate into higher fees and wider spreads, supporting revenue expansion. Post-financial crisis regulatory frameworks have shifted profit generation toward intermediation and financing rather than direct market bets. The earnings driver is flow intensity, not balance sheet risk.

$C Citigroup highlights strong growth in equities trading, where elevated volatility has increased transaction volumes across both institutional investors and hedge funds. Fixed income, currencies, and commodities trading continue to expand at a slower pace.
Investment banking activity is also showing signs of recovery after a prolonged slowdown, particularly in financing large-scale projects, including artificial intelligence investments. This indicates early-stage capital markets normalization.

$BAC Bank of America sees part of current revenue supported by deals announced previously but closed in the current quarter. This backlog effect implies that revenue strength is not solely a function of current conditions but also delayed execution from prior periods. The revenue recognition timing introduces a lagged earnings boost. This matters for assessing sustainability of current run rates.

Profits are expected to rise moderately relative to the sharp increase in trading revenue due to higher cost structures and shifts in business mix. Not all segments benefit equally, as elevated volatility may suppress IPO activity and capital raising, with companies and investors avoiding issuance during uncertainty. This creates divergence between trading strength and primary market weakness. The setup reflects uneven revenue composition.

Investors will focus on credit quality and exposure to private credit markets, where non-bank lending has expanded in recent years. Concerns are rising around how volatility and uncertainty impact this segment, especially after redemption waves in private credit funds. Banks may need to clarify risk exposure within loan portfolios. This introduces a credit-cycle sensitivity overlay to otherwise strong trading performance.

Earnings season begins with Goldman Sachs reporting first, followed by other major banks throughout the week. Beyond reported numbers, markets will assess forward guidance regarding whether volatility remains a sustained driver of trading activity or a temporary phenomenon linked to specific geopolitical events. The read-through extends to broader market conditions, investor risk appetite, and macro trajectory.

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