Wall Street banks report first-quarter earnings amid Iran war oil shock

Overview

The largest American banks began reporting first-quarter 2026 earnings on April 14, delivering results shaped by a quarter unlike any since the early days of the pandemic. The United States and Israel launched airstrikes on Iran on February 28, Iran closed the Strait of Hormuz in early March, and Brent crude oil surged past $120 a barrel — the largest supply disruption in the history of the global oil market, according to the International Energy Agency. Goldman Sachs, reporting a day early, posted record equities trading revenue of $5.33 billion as its traders capitalized on the chaos.

Why it matters

Bank earnings are the economy's first real-time readout on whether the Iran oil shock is bleeding from Wall Street trading floors into Main Street lending and credit.

Key Indicators

$5.33B

Goldman Sachs equities trading revenue

A record quarter for Goldman's equities desk, up 27% year-over-year, driven by hedge fund prime brokerage and elevated volatility.

46%

BlackRock net income growth

Net income rose to $2.2 billion despite assets under management declining to $13.89 trillion from $14.04 trillion at year-end.

$120

Peak Brent crude price per barrel

Oil hit its highest level in four years after Iran closed the Strait of Hormuz in early March, disrupting 20% of global supply.

-4.3%

S&P 500 Q1 2026 return

The broad market declined in the first quarter as the Iran conflict and oil shock weighed on sentiment.

3.5–3.75%

Federal funds rate

The Federal Reserve held rates steady in March 2026, with markets now pricing only one cut for the full year.

17%

Projected financial sector earnings-per-share growth

S&P 500 financial sector companies are expected to post 17% earnings growth, slightly above historical averages.

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People Involved

Jamie Dimon

Reporting Q1 2026 earnings; succession plan reportedly in motion

Jane Fraser

Leading multi-year organizational restructuring; reporting Q1 2026 earnings

Larry Fink

Reporting Q1 2026 earnings; overseeing $13.89 trillion in assets

David Solomon

Reported record equities trading quarter

Organizations Involved

JPMorgan Chase & Co.

Global Bank

Largest U.S. bank by assets; reporting Q1 2026 earnings April 14

The largest American bank by assets at $4.4 trillion, serving as a bellwether for the broader financial sector and economy.

Goldman Sachs

Global Investment Bank

Posted record equities trading revenue in Q1 2026

A global investment bank that reported its second-highest quarterly revenue on record in Q1 2026, driven by a record equities trading desk.

Citigroup

Global Bank

Mid-restructuring under CEO Fraser; expected to report 34% earnings growth

A global banking institution in the midst of a multi-year simplification that investors are watching for signs of a genuine turnaround.

Wells Fargo

National Bank

Operating under Federal Reserve asset cap; Q1 2026 earnings expected April 14

The fourth-largest American bank, still operating under a Federal Reserve-imposed asset cap that limits its balance sheet growth until regulators approve its risk management improvements.

BlackRock

Global Asset Manager

Beat Q1 2026 estimates; AUM declined to $13.89 trillion

The world's largest asset manager, overseeing $13.89 trillion and increasingly shaping markets through its expansion into private credit, cryptocurrency, and technology services.

Board of Governors of the Federal Reserve System

Central Bank

Holding rates steady at 3.5–3.75%; projecting one cut in 2026

The U.S. central bank whose interest rate decisions directly shape bank profitability through net interest income and set the backdrop for credit conditions across the economy.

Timeline

JPMorgan, Wells Fargo, Citigroup, and BlackRock report Q1 earnings
Earnings

Four major financial institutions reported before the opening bell, kicking off the broadest day of the Q1 2026 earnings season. BlackRock beat estimates with adjusted earnings per share of $12.53 on $6.7 billion in revenue. JPMorgan reported trading revenue up 15 percent.
Today • 07:00 EST
Goldman Sachs reports record equities trading quarter
Earnings

Goldman Sachs reported earnings per share of $17.55 on $17.23 billion in revenue, with equities trading hitting a record $5.33 billion and investment banking fees up 48 percent to $2.84 billion.
Yesterday
Iran ceasefire announced but fragile
Geopolitical

The U.S. and Iran reached a two-week ceasefire, including agreement to reopen the Strait of Hormuz. The S&P 500 posted its best weekly gain since November. Both sides subsequently violated the ceasefire.
7 days ago • 18:32 EST
Jamie Dimon warns of 'skunk at the party'
Statement

In his annual shareholder letter, JPMorgan's chief executive warned that war-driven inflation could push interest rates higher than markets expect, flagged the $1.8 trillion private credit market as vulnerable, and cautioned about recession risk.
April 6th, 2026
U.S. gasoline prices hit $4 per gallon
Economic

Average gasoline prices surged 30 percent from pre-conflict levels as the Hormuz closure disrupted global energy supply chains.
March 31st, 2026
Federal Reserve holds rates steady
Policy

The Federal Open Market Committee maintained the federal funds rate at 3.5 to 3.75 percent, with projections narrowing to one cut in 2026 as the oil shock threatened to reignite inflation.
March 18th, 2026
Brent crude surpasses $100 per barrel
Market

Oil prices crossed $100 for the first time in four years, eventually reaching $126 at their peak, as the Hormuz closure removed a fifth of global supply from the market.
March 8th, 2026
Iran closes the Strait of Hormuz
Geopolitical

Iran's Islamic Revolutionary Guard Corps blocked the strait, disrupting 20 percent of global oil supply. Tanker traffic dropped to near zero, and the KBW Bank Index plunged 13 percent.
March 4th, 2026
U.S. and Israel launch airstrikes on Iran
Geopolitical

President Trump authorized Operation Epic Fury, with nearly 900 strikes in 12 hours targeting Iranian military facilities, nuclear sites, and leadership. Supreme Leader Ali Khamenei was killed.
February 28th, 2026 • 15:38 EST

Scenarios

Banks ride volatility to a banner year as ceasefire holds

Discussed by: Goldman Sachs equity research, Morningstar financial sector analysts

If the Iran ceasefire solidifies and oil prices retreat toward $80, trading desks keep elevated revenue from lingering volatility while investment banking pipelines — already up 48 percent at Goldman — fully reopen. Net interest income stays robust at current Fed rates. Bank stocks recover their March losses and the KBW index returns to pre-conflict levels. This scenario requires the Strait of Hormuz to stay open and the Fed to signal its rate path clearly.

Oil stays elevated, Fed delays cuts, credit cracks emerge

Discussed by: Jamie Dimon (JPMorgan shareholder letter), Investing.com bank analysts

The ceasefire collapses or oil remains above $100 because of continued supply disruption. Persistent energy costs reignite inflation, forcing the Federal Reserve to hold rates at 3.5 to 3.75 percent through year-end or even raise them. Consumer credit deteriorates as gasoline and energy costs squeeze household budgets. Banks begin building loan loss reserves in Q2, echoing the pattern from Q1 2020. Investment banking freezes as corporate boards wait for clarity.

Stagflation scenario forces banks into defensive mode

Discussed by: Jamie Dimon (recession and stagflation warnings), Fortune, The Hill

The worst-case combination: oil at or above $120 sustained, inflation reaccelerating above 4 percent, and economic growth stalling. Dimon explicitly warned of this 'skunk at the party' scenario. Banks would see net interest income rise but loan demand collapse and credit losses spike. The private credit market, which Dimon flagged at $1.8 trillion, could face its first serious stress test. Bank valuations would compress significantly, repeating patterns from late 2022.

Trading revenue normalizes, steady-state growth resumes

Discussed by: Morningstar, S&P 500 financial sector analysts

Geopolitical volatility fades, taking the tailwind out of trading desks that thrived on chaos. Goldman's record equities quarter proves to be a one-off rather than a new baseline. Banks return to mid-single-digit revenue growth driven by consumer lending and wealth management. This is the consensus base case embedded in the 17 percent earnings growth projection for the financial sector, but it depends on no further geopolitical shocks.

Historical Context

Q1 2020 bank earnings during the onset of the pandemic (2020)

April 2020

What Happened

JPMorgan reported earnings per share of $0.78 versus $1.84 expected, setting aside $8.29 billion in credit reserves — the largest build in years. Wells Fargo earned just $0.01 per share and later cut its dividend for the first time since 2008. All six major banks collectively built over $25 billion in reserves in a single quarter.

Outcome

Short Term

Bank stocks fell roughly 40 percent from February to March 2020. The massive reserve builds shocked investors even though the pandemic context was known.

Long Term

Most reserves were released in 2021 as the economy recovered, producing outsized bank profits. The episode demonstrated that proactive provisioning, while painful, signals institutional strength.

Why It's Relevant Today

Q1 2026 presents a similar question: are banks provisioning adequately for the Iran oil shock's potential downstream effects on consumers and businesses, or are they underestimating the risk as they did in early 2008?

Q1 2022 bank earnings at the start of the Russia-Ukraine war (2022)

April 2022

What Happened

Russia invaded Ukraine on February 24, 2022, and the Federal Reserve raised rates for the first time since 2018 on March 16. JPMorgan built $902 million in credit reserves while Goldman Sachs beat expectations on strong fixed-income trading revenue of $4.72 billion. Citigroup disclosed a $1.9 billion hit from Russia exposure.

Outcome

Short Term

The KBW Bank Index fell roughly 6 percent during the April reporting window. A bifurcation emerged: trading desks profited from war-driven volatility while investment banking pipelines froze.

Long Term

Banks with significant trading operations outperformed peers focused on traditional lending for the rest of 2022 as volatility persisted. The pattern of geopolitical crisis boosting trading revenue at the expense of deal-making proved durable.

Why It's Relevant Today

The same trading-versus-banking split is playing out in Q1 2026. Goldman's record equities quarter and 48 percent investment banking surge suggest the current conflict may be resolving the split faster than in 2022, but the oil shock is more severe.

Q3 2008 bank earnings during the global financial crisis (2008)

October 2008

What Happened

Lehman Brothers filed for bankruptcy on September 15. JPMorgan's net income fell 84 percent to $527 million. Goldman Sachs posted its first quarterly loss as a public company. Citigroup lost $2.8 billion for the fourth consecutive quarter. Several major banks either failed, were acquired, or required government bailouts.

Outcome

Short Term

The KBW Bank Index fell approximately 50 percent in the second half of 2008. The federal government committed $700 billion in taxpayer funds through the Troubled Asset Relief Program.

Long Term

The crisis produced the Dodd-Frank Act, Basel III capital requirements, and a fundamental restructuring of bank regulation. Banks that survived emerged with far stronger balance sheets and higher capital ratios.

Why It's Relevant Today

The 2008 crisis remains the benchmark for systemic banking stress. In Q1 2026, banks hold significantly more capital — Citigroup's capital ratio of 13.2 percent is roughly double pre-2008 levels — suggesting the system is far better positioned to absorb an oil shock than a credit crisis.