Bank of America shares rise on profit beat

Today’s headlines

What’s happening: Shares of Bank of America rose on Wednesday after the company reported results for the first quarter.

What happened: The US bank reported better-than-expected sales and earnings for the quarter.

Equity trading revenues surged to a record high in the quarter due to higher market volatility amid the US-Iran war.

How were the results: The Charlotte, North Carolina-based company reported single-digit sales growth for the latest quarter.

• Revenues, net of interest expense, rose 7% year-over-year to $30.27 billion, topping consensus estimates of $29.93 billion.
• Net profits jumped almost ⁠17% to $8.6 billion, or $1.11 per share, beating Wall Street expectations of $1.00 per share.

Why it matters: Global equity markets remained bullish entering 2026, following several interest rate cuts by central banks around the world late last year and strong corporate earnings.

Market sentiment was soon hurt by growing tensions in the Middle East that culminated in the US invading Iran. Investors have also been nervous about AI valuations with so many big companies investing heavily in the new technology.

Market volatility generally benefits investment banks, which generate revenues from client activity.

Bank of America’s revenue from sales and trading jumped 13% to $6.4 billion in the first quarter, driven by record volumes in equity trading.

The bank also recorded strong growth in investment banking fees, which rose 21% to $1.8 billion in the first quarter due to rising global megadeals during the first three months ⁠of year.

Provision for credit losses fell to $1.3 billion, from $1.5 billion in the year-ago quarter, while investment banking fees surged 21% to $1.8 billion.

“We remain watchful of evolving risks. However, we saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy,” CEO Brian Moynihan said.

How shares responded: Bank of America’s shares rose 1.8% to close at $54.32 on Wednesday following the release of quarterly results. The stock has jumped more than 15% year to date.

What to watch: Investors will keep an eye on ongoing developments around the US-Iran war and the Federal Reserve’s monetary policy outlook.

The markets today

The euro in focus today ahead of inflation data

Context: The EUR/USD forex pair rose this morning amid hopes of a deal between the US and Iran.

Details: The euro remained close to multi-week highs as mediators reported progress in extending the ceasefire to allow more time for negotiations.

Iran expressed that it was open to resolving the situation, while the White House also signalled confidence in reaching a deal.

Meanwhile, persistent inflationary pressures from higher energy prices led to speculations of at least two interest rate hikes by the European Central Bank by the end of the year.

Data released on Wednesday showed that Eurozone’s industrial production surged by 0.4% in February. This marked a rebound after two straight months of decline and topped market estimates of 0.3%.

Weakness in the US dollar lent further support to the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped around 0.1% to 98.01 this morning.

The EUR/USD pair rose around 0.1% to 1.1807, while the EUR/GBP forex pair edged lower to 0.8700 this morning.

What to watch: Investors will continue monitoring developments related to the US-Iran war.

Data on Eurozone’s inflation rate (1300 UAE Time) and European Central Bank’s monetary policy meeting accounts (1530 UAE Time) will be released today. Analysts expect Eurozone’s annual inflation rate to accelerate to 2.5% in March from 1.9% in the previous month.

Other Markets: US trading indices closed mixed on Wednesday, with the S&P 500 and Nasdaq 100 up by 0.80% and 1.40%, respectively, and the Dow Jones index down by 0.15%.

The news shaping the markets

Ukraine’s President Volodymyr Zelenskyy is looking to secure more arms deals with allies. The news sent the USD/RUB pair higher in forex trading this morning.

China’s retail sales grew by 1.7% year-over-year in March, easing from a 2.8% surge in the January-February period. The latest reading coming in short of market estimates of a 2.3% gain lent support to the USD/CNY forex pair.

Australia’s unemployment rate came in unchanged at 4.3% in March and in-line with market estimates, which sent the AUD/USD pair higher in forex trading this morning.

Israel’s annual inflation rate eased to 1.9% in March from 2% in the previous month. The latest reading coming in lower than market expectations of 2.1% exerted pressure on the USD/ILS forex pair.

Peru’s GDP expanded 3.68% year-over-year in February, accelerating from 3.54% in the previous month. The latest reading came in above market estimates of 3.1%, sending the USD/PEN pair lower in forex trading this morning.

What else to watch today

Italy’s inflation rate (1200 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), Brazil’s IBC-BR economic activity (1600 UAE Time), Canada’s new motor vehicle sales (1630 UAE Time) as well as US initial jobless claims (1630 UAE Time), Philadelphia Fed manufacturing index (1630 UAE Time), continuing jobless claims (1630 UAE Time), NY Fed services activity index (1630 UAE Time), industrial production (1715 UAE Time), capacity utilisation (1715 UAE Time), manufacturing production (1715 UAE Time) and EIA natural gas stocks change (1830 UAE Time).