Earnings season begins: Banks on the front lines and the shadow of geopolitics
April is an interesting time in the investor calendar as listed companies begin to release their first quarter (Q1) results. 2026 has begun in an exceptional environment: after a volatile first year dominated by the energy crisis, geopolitics and the renewed inflation debate.
Banks on the front line
As is tradition, the earnings season opens with the major US banks. These include Goldman Sachs, JPMorgan, Citigroup, BlackRock and Morgan Stanley. The results from the banking sector provide investors with important information, as they directly reflect consumer solvency and the impact of the interest rate environment.
In addition to the larger banks, other companies publishing their results this weekinclude the technology side Netflix and the healthcare side Abbott. Also noteworthy when looking at the big picture is the challenging start of the software sector (SaaS). Investors have begun to question whether companies can really monetize their artificial intelligence investments quickly enough to justify their high valuations. The upcoming earnings season may also provide more information on this topic.
Geopolitics: The "black swan" of the market
At the beginning of the year, markets have had to navigate in difficult geopolitical terrain. Tensions in the Middle East, and in particular the situation in the Strait of Hormuz, have caused significantuncertainty in the markets and affected investor sentiment. In particular, the rise in oil prices has increased inflation. Although last week’s ceasefire announcement brought temporary relief, uncertainty in the markets continues.
Geopolitics and, for example, rising energy prices can quickly affect companies' costs and, consequently, their earnings season. This can make companies cautious about their future prospects.
A correction or a new direction?
The first quarter of 2026 was a cold shower for many investors. While 2025 ended on euphoria, Q1 brought with it a sense of realism and fear of a return to inflation. However, just as pessimism peaked at the end of March, the market made a sharp U-turn.
Looking at the price development of the S&P 500 and NASDAQ-100 indices since the beginning of the year, a clear downward trend is evident, though there has been a strong recovery back up in the past few weeks. The technical picture for both indices was clearly weaker just a moment ago, and the price was below the important SMA200 moving average, among other things. With the upward movement, the price has returned above this moving average for both indices, as well as the shorter-term moving averages, the SMA50 and the EMA25.
The key question is whether the recent rally is sustainable. A historically strong rally just before earnings season sets the bar high. If the current and future outlook does not match this new optimism, the market could be vulnerable to another downward correction . In addition, at the same time, the ongoing geopolitical situation can bring sudden changes and price movements to the market.
Related Products
S&P 500, 1 year chart
S&P 500, 5 year chart
Related Products
NASDAQ-100, 1 year chart
NASDAQ-100, 5 year chart
What to expect?
The first quarter earnings season could serve as an important milestone for the market. If banks, tech giants and other sectors can demonstrate that their earnings can withstand higher energy costs and persistently high interest rates, the market could see this as a relief. On the other hand, there is also the potential for disappointment. How companies assess their prospects for the rest of the year will be particularly important.
Indicators shown on the graphs:
● SMA200: 200-day moving average, red.
● SMA50: 50-day moving average, blue.
● EMA25: 25-day exponential moving average, yellow.
Risks
Credit risk of the issuer:
Investors in the products are exposed to the risk that the Issuer or the Guarantor may not be able to meet its obligations under the products. A total loss of the invested capital is possible. The products are not subject to any deposit protection.
Currency risk:
If the product currency differs from the currency of the underlying asset, the value of a product will also depend on the exchange rate between the respective currencies. As a result, the value of a product can fluctuate significantly.
Market risk:
The value of the products can fall significantly below the purchase price due to changes in market factors, especially if the value of the underlying asset falls. The products are not capital-protected
Product costs:
Product and possible financing costs reduce the value of the products.
Risk with leverage products:
Due to the leverage effect, there is an increased risk of loss (risk of total loss) with leverage products, e.g. Bull & Bear Certificates, Warrants and Mini Futures.
External author:
This information is in the sole responsibility of the guest author and does not necessarily represent the opinion of Bank Vontobel Europe AG or any other company of the Vontobel Group. This information is sponsored by Bank Vontobel Europe AG, which may be a counterparty to transactions involving the financial instruments discussed in this information. The further development of the index or a company as well as its share price depends on a large number of company-, group- and sector-specific as well as economic factors. When forming his investment decision, each investor must take into account the risk of price losses. Please note that investing in these products will not generate ongoing income.
The products are not capital protected, in the worst case a total loss of the invested capital is possible. In the event of insolvency of the issuer and the guarantor, the investor bears the risk of a total loss of his investment. In any case, investors should note that past performance and / or analysts' opinions are no adequate indicator of future performance. The performance of the underlyings depends on a variety of economic, entrepreneurial and political factors that should be taken into account in the formation of a market expectation.
Disclaimer:
This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future performance.
© Bank Vontobel Europe AG and/or its affiliates. All rights reserved.