Bank stocks are having their best day in weeks. JPMorgan Chase is up 3%, Goldman Sachs is surging nearly 4%, and Wells Fargo is climbing over 3% as a U.S.-Iran ceasefire sends relief through financial markets. But the real test starts Monday, when Wall Street’s biggest banks begin reporting first-quarter 2026 earnings.
The setup is unusual. The Financial Select Sector SPDR Fund (XLF) is still down nearly 6% year-to-date despite today’s rally, and hedge funds have been aggressively shorting financial stocks in recent weeks. Yet analysts at Wells Fargo say bank stocks are “poised to rebound from their slump,” and the numbers could prove them right.
The Earnings Calendar
Goldman Sachs kicks things off on Sunday, April 13, followed by JPMorgan Chase and Wells Fargo on April 14. Bank of America closes out the big four on April 15. Together, these institutions represent over $1.7 trillion in combined market capitalization.
Here is what analysts expect:
- JPMorgan Chase (JPM) — Trading at $306.48 with a P/E of 14.86. The bank posted 2025 EPS of $20.02 and revenue of $168.2 billion. Analysts have a consensus Buy rating with a $330 price target, implying nearly 8% upside. JPMorgan’s investment banking and trading desks likely benefited from elevated volatility during the quarter.
- Goldman Sachs (GS) — At $896.06, Goldman is up over 55% from its 52-week low. The firm posted 2025 revenue of $59.4 billion, up 13.9% year-over-year, with net income surging 20.3%. Analysts carry a Hold rating, however, with a price target of $872 — slightly below current levels. Capital markets activity and advisory fees will be key metrics to watch.
- Wells Fargo (WFC) — Trading at $84.53 with a forward P/E of 13.06. The stock is down from its 52-week high of $97.76 but carries a Buy consensus with a $96.53 target, suggesting 14% upside. The key question: has the asset cap been a drag or a discipline?
- Bank of America (BAC) — At $51.52, Bank of America posted 2025 EPS of $3.81, up 19.4% year-over-year. Revenue climbed 7.4% to $107.4 billion. With a Buy rating and a $58.18 target, analysts see roughly 13% upside. Net interest income trends will be the headline number.
What the Market Is Pricing In
Despite today’s ceasefire rally, the XLF remains well below its 52-week high of $56.52. The fund holds 80 stocks across the financial sector, with Berkshire Hathaway (12.3%), JPMorgan (11.3%), and Visa (7.1%) as its top three positions.
The disconnect between today’s enthusiasm and the year-to-date losses tells a story. Geopolitical uncertainty — particularly the Iran-Hormuz crisis that dominated March and early April — hammered financial stocks harder than the broader market. Bank stocks carry a beta near or above 1.0 (BAC’s is 1.24), meaning they amplify market swings in both directions.
The VIX, Wall Street’s fear gauge, dropped below 20 for the first time since Middle East tensions escalated, according to market data from April 8. That is a meaningful threshold. When the VIX sustains readings below 20, financial stocks have historically outperformed over the following quarter, according to research from Bank of America’s equity strategy team.
Three Things That Will Move Bank Stocks This Week
1. Net Interest Income Trajectory
The Federal Reserve has held rates steady while inflation remains elevated, complicated by the oil shock from the Hormuz crisis. Fed Vice Chair Philip Jefferson recently noted that energy price volatility “complicates the inflation outlook.” For banks, this creates a mixed picture: higher rates support net interest margins, but economic uncertainty can slow loan demand. Watch for forward guidance on net interest income more than the backward-looking Q1 number.
2. Credit Quality and Loan Losses
Consumer credit stress has been a creeping concern throughout 2025 and into 2026. Delinquency rates on credit cards and auto loans have ticked higher. If banks increase loan loss provisions significantly, it could overshadow otherwise strong revenue numbers. JPMorgan’s provision for credit losses will be closely scrutinized as a bellwether for the sector.
3. Capital Markets and Trading Revenue
The first quarter of 2026 was anything but quiet. The Iran crisis, oil price spikes, currency volatility, and a brief VIX spike above 30 likely generated significant trading revenue for Goldman Sachs and JPMorgan’s markets divisions. Advisory revenue is another wildcard — deal-making activity slowed during the geopolitical uncertainty, but the pipeline may be building for the second half.
The Bigger Picture
Bank stocks are not just a play on earnings beats or misses. They are a proxy for confidence in the U.S. economy. When investors buy bank stocks, they are betting that loan growth will continue, credit losses will remain manageable, and the Fed will not be forced into an emergency rate cut.
The fact that hedge funds have been shorting financials adds an interesting wrinkle. If earnings come in better than expected, a short squeeze could amplify the rally. Goldman Sachs, trading near its 52-week high with a Hold consensus, is the most vulnerable to a violent move in either direction.
For long-term investors, the valuations are not stretched. JPMorgan trades at under 15 times earnings. Bank of America at 13 times. Wells Fargo at 13 times. These are not speculative multiples — they are pricing in a moderate slowdown, not a recession.
The ceasefire rally is noise. The earnings are signal. Starting Monday, the banks will tell us whether the economy under the surface is stronger or weaker than the headlines suggest.
Disclosure: This article was produced with AI assistance and reviewed before publication. It is for informational purposes only and is not investment advice.