Wall Street’s biggest banks head into first-quarter earnings reporting this week against a backdrop of $100 oil, a fragile Middle East ceasefire, and investor uncertainty about when — or whether — the Federal Reserve will cut interest rates in 2026.
Goldman Sachs opened the reporting season Monday, with JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley, and Bank of America all scheduled to follow within days. Analysts expect results to reflect the volatility of a quarter in which the U.S.–Iran conflict disrupted energy markets, elevated inflation pressures, and upended projections for Federal Reserve policy easing.
Rate Cut Hopes Fade
The March Consumer Price Index showed a significant surge in energy inflation at the headline level, though core inflation remained relatively contained. However, with oil prices having exceeded $100 per barrel for an extended period, economists warn that energy costs are likely to pass through to broader price measures in coming months. BlackRock’s investment team noted that inflation remains too high to achieve the Federal Reserve’s two percent target in the near term, effectively dimming hopes for rate reductions in 2026.
GDP data for the fourth quarter of 2025 painted an equally sobering picture. The U.S. economy grew at just a 0.7 percent annualized rate in Q4, well below initial expectations of 2.5 percent growth, reflecting a broad-based slowdown in consumer spending, business investment, and international trade. Full-year GDP for 2025 came in at 2.1 percent, down from 2.8 percent in 2024.
Sectors to Watch This Earnings Season
Energy stocks surged dramatically in the first quarter, gaining nearly 38 percent for the three months ending March 31, driven by elevated oil prices following the outbreak of the U.S.–Iran conflict. In sharp contrast, Technology shed more than seven percent over the same period, while Financials dropped nearly nine and a half percent as rising energy costs weighed on growth and credit quality concerns mounted.
Investors will be scrutinizing bank commentary this week for signals on loan growth, net interest margins, and management’s assessment of consumer resilience in the face of higher energy prices and tighter financial conditions. Netflix, BlackRock, Johnson & Johnson, and PepsiCo are among other major companies reporting later in the week.
Ceasefire Optimism Lifts Futures
Futures tied to the major U.S. averages edged higher on Tuesday as markets remained cautiously optimistic that diplomatic progress between Washington and Tehran would ease energy supply constraints. President Trump stated publicly that Iran had initiated contact and that a deal was being actively pursued, fueling a relief rally that pushed the S&P 500 to its highest close since before the war began.
| The S&P 500 closed at 6,886.24 on Monday — its highest level since the U.S.–Iran conflict began — as the Nasdaq gained 1.23% and the Dow added 301 points. |
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Lovel is a contributor at OC Partnership, focusing on business trends, marketing, technology developments, and industry insights that help professionals stay informed and make better decisions. With a practical, research-driven approach, Lovel delivers clear and accessible content designed for business owners, marketers, and professionals.
