U.S. Bank Earnings Look Strong, but the Iran War Is Rewriting the Outlook
The setup for the quarter is favorable on paper. Reuters reported that Goldman Sachs will begin the reporting season on April 13, followed by JPMorgan Chase, Wells Fargo, and Citigroup on April 14, with Bank of America and Morgan Stanley due on April 15. The quarter ended March 31 after a period of sharp swings in markets tied to conflict in the Middle East and Ukraine, volatile oil prices, and broader geopolitical stress, yet that same volatility also helped generate trading opportunities and accelerated deal activity before financing conditions could worsen.
The strongest tailwind appears to be capital-markets activity. According to Reuters, nearly two dozen global deals worth more than $10 billion were signed in the first quarter, alongside 40 deals above $5 billion, while Jefferies estimated global M&A proxy fees at $11.3 billion, with Goldman leading the pack. That backdrop helps explain why bank management teams entered the quarter sounding constructive: Reuters noted that JPMorgan had guided to strong first-quarter growth in investment-banking fees and markets revenue, Bank of America expected net interest income to rise at least 7% and investment-banking fees to increase 10%, and Citigroup projected mid-teens percentage growth in both investment-banking fees and markets revenue. Citigroup’s own March conference remarks show Jane Fraser saying M&A and equity capital markets were the main drivers of that anticipated fee growth.
Even so, the market’s real focus is shifting from backward-looking revenue strength to forward-looking risk. Reuters said analysts are especially watching management commentary on 2026 loan growth, particularly in commercial and industrial lending and commercial real estate, because Federal Reserve data suggests C&I loan growth strengthened in the first quarter but could soften if energy shocks or geopolitical strain persist. Wells Fargo had already said in February that it expected loan growth this year, particularly in credit cards and autos, with mortgage momentum also improving, but those assumptions were formed before the latest escalation in Middle East tensions.
That is where the Iran war becomes more than a macro backdrop. In his annual shareholder letter dated April 6, JPMorgan CEO Jamie Dimon warned that the war could trigger prolonged oil and commodity price shocks, reshape supply chains, keep inflation stickier than expected, and ultimately push interest rates higher than markets currently anticipate. That warning matters because stronger trading and advisory revenue can lift quarterly profits, but a more inflationary and unstable environment could also delay rate relief, pressure borrowers, and make executives more cautious on credit and capital deployment. For investors, the first-quarter numbers may look solid, but the real question is whether bank management teams still see 2026 as a year of expansion or as a year of defensive balance-sheet management.
