Q1 Earnings Season Mired In Uncertainty As Banks Begin Reporting Friday

The U.S. earnings season kicks into high gear this week, with major banks leading the charge. But as JPMorgan, Citigroup, and Wells Fargo report on Friday, April 12, investors are grappling with a landscape of unprecedented uncertainty. Tariff-related economic headwinds, lingering recession fears, and volatile markets have set the stage for a quarter that could redefine investor sentiment for the year.

The Banks to Watch: April 8’s Frontline

The earnings parade begins with JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) all reporting on April 8. JPMorgan, as usual, will set the tone. Analysts expect EPS of $4.61 and revenue of $44.11 billion, but the real focus will be on CEO Jamie Dimon’s shareholder letter and his take on the tariff fallout.

Citigroup and Wells Fargo, reporting alongside JPMorgan, offer their own storylines. Wells Fargo’s CFO Michael Santomassimo has emphasized net interest income growth in 2025, a theme likely to dominate given the Federal Reserve’s prolonged high-rate environment.

The Second Wave: Goldman, BofA, and Morgan Stanley on April 16

The earnings crescendo continues on April 16 with Goldman Sachs (GS), Bank of America (BAC), and Morgan Stanley (MS). Goldman’s stock faces a critical juncture: its fair value estimate suggests nearly 15% upside, but trading revenue could be dented by macroeconomic volatility. Meanwhile, Bank of America’s 80% surge in mortgage applications in Q1—driven by rising housing inventory—could provide a silver lining in an otherwise sluggish market.

The Elephant in the Room: Tariffs and Recession Risks

The overarching theme is clear: tariffs are the wildcard. The U.S. has suspended most tariffs for 90 days, but China remains under rates exceeding 100%, creating a drag on corporate margins and consumer spending. Bank executives have been vocal: Dimon has warned of recession risks, while others have cited stalled M&A activity. The Klarna IPO delay and a broader decline in dealmaking underscore the uncertainty.

The Broader Earnings Picture

The S&P 500 is projected to grow earnings by 7% in Q1, but early results have been shaky. Delta Air Lines’ underwhelming performance pushed the beat rate to just 60%, below the historical 75% average. Banks, however, could buck this trend. Net interest income—a key revenue driver for lenders—has surged as high rates persist, while trading desks may benefit from market volatility.

Conclusion: Navigating the Crossroads

The Q1 earnings season is a high-stakes test for investors. Banks are positioned to deliver solid results on the back of robust net interest income, but the tariff-driven macroeconomic fog looms large. Goldman Sachs’ potential upside and Bank of America’s mortgage boom highlight pockets of opportunity, while JPMorgan’s leadership will set the tone for broader market sentiment.

The data tells a mixed story: 15% upside for Goldman, 80% mortgage growth at BofA, and a 7% S&P earnings forecast. Yet with tariffs unresolved and recession risks elevated, the path forward remains fraught. Investors will need to parse each earnings call for clues on whether banks can navigate this uncertainty—or if the cracks in the economy are finally showing.

The next two weeks will decide whether this earnings season becomes a catalyst for optimism or a harbinger of tougher times ahead.