Major U.S. Banks Report Strong First-Quarter Profits Amid Trading Surge and Economic Risks

Dimon noted looser lending standards in parts of the financial sector, including weakening underwriting by non-bank lenders with less government oversight. Markets faced disruptions from artificial intelligence models and the Iran war. Investors remained cautious until resolution of the Iran conflict.

Other major banks also reported strong results, capping a robust start to earnings season. Goldman Sachs posted record equities trading revenue the previous day, surpassing expectations. Citigroup announced its highest quarterly revenue in a decade at $24.63 billion, with profit up 42% and trading revenue rising 19% to $7.2 billion.

Citigroup's fixed-income desk, focusing on bonds and interest-rate products, increased 13%. The bank completed 90% of its transformation programs and divestitures. The results showed strong top-line growth amid restructuring. Wells Fargo reported higher profits from trading gains due to market swings, though net interest income of $12.1 billion fell short of expectations.

The bank maintained its full-year forecast of about $50 billion for that category. The bank's CEO said American households and businesses were holding up well despite economic turmoil worldwide. The CEO warned of rising stress for less affluent consumers from higher energy prices and declining confidence indicators.

Bank of America and Morgan Stanley were scheduled to report results the following day. The strong performances occurred against a backdrop of global uncertainties, including wars in the Middle East and Ukraine. The Iran conflict posed risks to supply chains and oil prices.

Higher oil prices could affect American homeowners and firms through extended disruptions. Banks prepared for a range of environments given the unpredictable markets. The first-quarter results highlighted the sector's ability to capitalize on volatility while navigating broader economic challenges.