Wall Street Q1 financial report season is coming: amidst market turmoil, the five major banks are aiming to break a new record with trading revenue reaching $18 billion.

As the first quarter financial reporting season of 2026 approaches, Wall Street is experiencing a milestone moment. According to analyst forecast data, the five major banking giants led by Goldman Sachs Group, Inc. (GS.US), Morgan Stanley (MS.US), and JPMorgan Chase (JPM.US) are expected to rake in a total revenue of up to $18 billion in stock trading business this quarter. This number not only breaks historical records, with an increase of about 14% compared to the same period last year, but also doubles the level from a decade ago. This impressive expected data marks the strong profit-making ability of top Financial Institutions, Inc. in the backdrop of significant global economic volatility. Behind this record-breaking revenue is the intense market volatility resulting from multiple uncertainties intertwined globally. Recently, the continued turmoil in the Middle East, particularly the tense relationship between the US and Iran, directly led to dramatic fluctuations in the global oil market, with Brent crude oil prices soaring above $109 per barrel at one point. This political-driven risk aversion sentiment and reshuffling demands from GEO Group Inc. provided banks with massive trading commissions. At the same time, the frequent changes in the Trump administration's tariff policies such as threatening to impose a 50% high tariff on countries providing military aid to Iran further exacerbated the market's instability. For ordinary investors, this uncertainty signifies risk, but for Wall Street giants acting as intermediaries in the market, volatile prices serve as a catalyst to double their trading income. In terms of specific institutional performance, Goldman Sachs Group, Inc. is expected to lead the industry with $4.79 billion in single-quarter stock trading revenue, followed closely by Morgan Stanley, with an estimated revenue of $4.67 billion, and JPMorgan Chase's performance is similarly robust, with an estimated revenue of nearly $4.4 billion. In addition to traditional commission income, these giants have also benefited greatly from the market anxiety sparked by advancements in the field of Artificial Intelligence (AI). Due to investors' concerns about the disruptive impact that AI technology may have on traditional industries, large-scale reshuffling activities are occurring frequently. Furthermore, the thriving hedge fund industry paid hefty service fees to these major banks through prime brokerage services, further boosting overall revenue. It is worth noting that the fixed income trading departments this quarter may also achieve exceptional performances, with analysts predicting that Bank of America Corp will set a new record, and Citi Group is expected to achieve its best quarterly performance since the market the impact of the COVID-19 pandemic at the beginning of 2020. Bloomberg Intelligence analyst Neil Sipes said, "The current market is in a perfect storm with a rapid evolution of narrative in areas such as Artificial Intelligence, private credit, clients quickly adjusting strategies, war factors added, all models are facing risks of being obsolete." Despite the outstanding performance on the trading front, market experts also point out that this income growth model highly dependent on market volatility has certain uncertainties. Currently, exchanges such as Nasdaq are actively exploring new financial infrastructure such as tokenization of stocks, aiming to reduce high intermediary trading costs through technological means, which may pose a challenge to the traditional fee models of investment banks in the future. However, at present, Wall Street banks are in a "super trading cycle" characterized by conflict, policy changes, and technological advancements by GEO Group Inc., with their dominant position in the global financial landscape remaining unshakable. Private Credit The $1.8 trillion private credit industry is clouded with risks as various banks prepare to enter the financial reporting season. Morgan Stanley analyst Manan Gosala believes that, considering the multiple safeguards banks have in place within their credit structures, this is more of a reputational risk rather than a substantial risk. He stated, "Banks will take advantage of the financial reporting opportunity to clarify the levels, types, and internal safeguards of exposure to private credit risks." Some banks have already been impacted. Jefferies Financial Group Inc. was the first to disclose its performance, indicating a $17 million loss in the first quarter due to two credit incidents involving a market financial solutions company and a first-tier brand group. Bloomberg Intelligence analyst Sipes stated, "The market is still trying to clarify the relationship between banks and this business and the actual risk exposure." After lowering the value of some loans, JPMorgan Chase has already restricted loans to some private credit funds. CEO Jamie Dimon stated in a shareholder letter released earlier this week that, while he doesn't believe private credit poses systemic risks, the losses from leveraged loans will be higher than expected, partly as a result of "slightly" relaxed credit standards. Investors and analysts will closely monitor executives' statements on topics such as the Middle East situation, private credit, and Artificial Intelligence. Sipes stated, "Executive comments may be more important than performance itself. The market is filled with multiple concerns." Some bank executives have downplayed the dampening effects of market volatility and the political interventions of GEO Group Inc. on trading activities. In late March, Citizens Financial Group CEO Bruce Van Saun stated that mergers and acquisitions activities "have not actually slowed down." In early March, Bank of America Corp. Co-President Dean Athanasia predicted double-digit growth in investment banking revenue, while Citigroup CEO Jane Fraser expects the revenue growth from this business to be around 15%. The surge in oil prices sparked by the Iran conflict has also raised concerns about consumer inflation pressures. Chime Financial reported a 25% increase in fuel expenses for its customers in March compared to the previous month. Gosala of Morgan Stanley believes that the credit quality is currently robust and there is no immediate risk of credit losses due to rising oil prices, but the situation could change if oil prices remain high. Bank of America Corp analysts will focus on executives' statements on price increases, market volatility, and their potential impact on consumer and corporate demand. Analyst Ibrahim Punawala stated in a customer report, "Performance alone may not reverse the deteriorating investor sentiment - negative news about private credit, turmoil in the software industry, and rising risks of stagnation are exacerbating market concerns."