US Q1 bank earnings – strong performance overshadowed by geopolitics

​​​Q1 to reveal solid earnings growth

​The big six US banks are poised to report a strong round of earnings. All are expected to see a rise in earnings, with some likely to see very healthy double-digit increases. This is a reflection of the strength of the US economy, which has successfully navigated the challenges of Trump’s tariff drama, as well as the recovery in the global economy following the Covid years and the period of higher inflation. 

​M&A activity, a key barometer of economic health, was strong in Q1, helping to lift revenues from advisory activity and underwriting fees. Once more, Goldman Sachs was a key beneficiary of this. Trading revenues are also expected to be strong, after a quarter that saw gyrations for gold and silver that helped to make up for a quieter period for global stock markets. 

​But what comes next? 

​The problem for investors mirrors the situation seen a year ago in 2025. Then Q1’s performance was overshadowed by the tariff drama that erupted from early April. Any optimism around Q1’s strength was outweighed by concerns that tariffs would cause global growth to weaken or even contract.

​For investors, this all feels eerily familiar. Q1 2026 ended with the US undertaking a war in the Middle East that resulted in huge disruption to global energy supplies. While it began to have an effect in March, the full impact may take months to be seen in full. 

​US banks will face a tricky task when it comes to earnings. They have reason to be optimistic about the outlook on some fronts, but aware that inflation may rise and growth may slow from here, hurting key areas such as M&A and lending. 

​While not completely irrelevant therefore, the importance of Q1’s numbers is diminished. Earnings for Q2 and  beyond depend on whether the US and Iran can come to a sustainable deal. If not, then the risk is that any forecasts become too optimistic.  

​Bank stock prices already under pressure

​US bank stocks ended 2025 on a high, much like the broader US indices themselves. Gains continued into January, but from mid-month onwards prices came under pressure. War in the Middle East saw stock markets enter a period of sustained losses, the longest such stretch in months, although the actual percentage declines were muted when compared with 2025’s tariff drama. 

​The announcement of a ceasefire meant that stock prices recovered, though they remain below their January highs. The question now for investors is whether these declines priced in enough bad news to allow a continued recovery in April and beyond.

​JPMorgan stock price – technical analysis 

​As one of the first US banks to report, JPMorgan provides a useful proxy for the whole sector. Its stock hit a record high in the opening days of 2026, but since then the performance has been less encouraging.

​A series of higher highs and higher lows was finally broken as it slumped below $300 in January, breaking below the December lows, though the late November lows remained intact. 

​More ominously, the price rallied into February, but ran out of stream around $320 and created a lower high, the first such event since March 2025. A more risk-off environment drove the stock price down to $280 by early March, where it then found support.

​While the price has recovered, moving back above $300, it still risks creating a lower high that might leave the short-term bearish view intact.