Big US banks rake in near $50bn profit as Iran war shakes markets
Big US banks raked in nearly $50bn (£37bn) worth of profits in the first three months of the year, as they benefited from stock market turbulence triggered by the US-Israeli war on Iran.Wall Street’s largest lenders have reported a jump in first-quarter earnings, reflecting the surge in demand for trading services as investors dumped risky stocks and bonds and sought safer havens for their cash.On Wednesday, Bank of America and Morgan Stanley posted a leap in profits, joining Goldman Sachs, JP Morgan, Citi and Wells Fargo in announcing strong results this week.Collectively, the six banks reported $47.4bn in profits.
Investors have been trying to cut their exposure to companies due to suffer as a result of economic shocks caused by the Middle Eastern conflict.Disrupted tanker traffic in the strait of Hormuz has led to a rise in energy prices, raising inflation forecasts, borrowing rates and the likelihood of a global recession.Market jitters have also amplified existing fears about whether some AI companies are worth as much some have claimed, and renewed concerns over the quality of loans issued by the once-booming private credit sector.But investor panic has been a gift to trading desks at many US investment banks, helping lenders such as JP Morgan report a 13% jump in profits to $16.5bn in the first quarter, compared with the same period a year earlier.
Goldman Sachs announced its profits had jumped 19% in the first three months of the year to $5,6bn, a figure that its chief executive, David Solomon, hailed as a “very strong performance … even as market conditions became more volatile”,Solomon told analysts the environment had changed significantly since the turn of the new year, before the US and Israel began attacking Iran in late February,He said 2026 “began with a degree of optimism”,“Markets hit record highs and confidence continued to build, with most clients focused on growth, strategic activity, and capital deployment … things were only moving a straight line.
And as the quarter progressed, the macro environment started to weigh on sentiment.”Bank of America, the second-largest US lender, said on Wednesday that profits had grown 17% in the first quarter to $8.6bn as volatility increased activity on its trading desk.However, its chief executive, Brian Moynihan, said the bank’s board “remain watchful of evolving risks”, reflecting wider concerns that an extended conflict in the Middle East could knock household spending, business revenues and ultimately global growth.The International Monetary Fund said on Tuesday that a further escalation of the Iran conflict could cause a global recession, adding that net energy importers and developing nations would face the biggest hit.
That included the US, with the IMF having lowered its 2026 growth forecast by 0.1 percentage points, to 2.3%.A downturn could knock bank earnings, resulting in a drop in demand for loans and mortgages, while discouraging business clients from pursuing the kind of mergers and takeovers that increase investment banking fees.In the meantime, US banks are cheering their first-quarter performance, with Citi having reported a 42% rise in profits to $5.
8bn and Morgan Stanley posting a 30% rise in profits to $5.6bn.Wells Fargo announced a 7% increase in first-quarter profits to $5.3bn.Banks used some of their profits to buy back shares from investors.
JP Morgan spent $8,3bn – a quarterly record for the bank – while Citi spent $6,3bn, the highest in at least 20 years,Goldman spent $5bn, Wells Fargo $4bn and Morgan Stanley $1,8bn.
Bank of America spent $7.2bn, the highest in four years.
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Apple’s latest MacBook Air is its most powerful yet, comes with double the starting storage and is better than ever for getting work done and as the benchmark for a consumer laptop. But this year the new lower-cost MacBook Neo has muddied the waters.The Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more
China now the ‘good guy’ on AI as Trump takes ‘wild west’ approach, MPs told
China is now the “good guy” on AI rather than Donald Trump’s US, where the technology is being pursued in a dangerous “wild west” manner, a former UN and UK government adviser has told MPs.Prof Dame Wendy Hall, who was a member of the UN’s AI advisory board and co-wrote a review of AI for Theresa May’s government, told the House of Commons business and trade committee that China was backing multinational attempts to introduce global governance of AI, in contrast to America, which had set up a race between profit-hungry companies that relied on hype.“China is doing some amazing work in AI, and in fact, at the moment they’re acting as the good guys because the US is totally against any regulation and talk about global governance,” said Hall, who is director of the Web Science Institute at the University of Southampton. “It’s all Maga. It’s all: we’re going to win at all costs
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AI companies make powerful tech – but they’re also savvy marketers
Hello, and welcome to TechScape. I’m your host, Blake Montgomery, the Guardian’s US tech editor, writing to you from my happy village in Pokopia.Artificial intelligence companies make powerful products. They also make outlandish claims.Last week, Anthropic released Claude Mythos, an AI model focused on cybersecurity, which has inspired widespread thrill and panic over how capable it is said to be
Don’t make Marshal Foch’s mistake on AI | Letters
Emma Brockes’ article struck a chord (It’s finally happened: I’m now worried about AI. And consulting ChatGPT did nothing to allay my fears, 8 April). I am reading Marc Bloch’s Strange Defeat, in which the eminent French historian and soon-to-be-executed resistance worker gives a first-hand account of the collapse of the French army in 1940. He attributes the debacle at least in part to a failure of imagination on the part of the French general staff, who were incapable of grasping that technology, and war, had fundamentally changed since 1918.Brockes’ article suggests that we, and our leaders, are suffering from the same inability to understand that a technology which is currently amusingly alarming will develop in less amusing ways – the future Marshal Ferdinand Foch had, according to Bloch, earlier dismissed aircraft as being a toy for hobbyists and not of any military interest
Meta creating AI version of Mark Zuckerberg so staff can talk to the boss
If you are one of Meta’s almost 79,000 employees and cannot get hold of the boss, do not worry. The owner of Facebook and Instagram is reportedly working on an AI version of Mark Zuckerberg who can answer all your queries.The AI clone of Zuckerberg, Meta’s founder and chief executive, is being trained on his mannerisms and tone as well as his public statements and thoughts on company strategy.The rationale behind the project, according to the Financial Times, is that employees could feel more connected to one of the most powerful people in Silicon Valley.The Meta chief has a history of creating and experimenting with digitalised versions of himself
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