Goldman Sachs warns that rising oil prices may pose a risk to financial sector earnings reports

LootboxPhobia · 2026-04-07T18:24:50+00:00

The U.S. stock market declined on Tuesday as investors focus on the Middle East situation and the upcoming earnings season. Goldman Sachs warned that a closure of the Strait of Hormuz could impact global oil supplies, and rising oil prices may exacerbate inflation. Analysts expect first-quarter net profits for the banking sector to grow and recommend investing in large banks such as Bank of America.

LootboxPhobia

2026-04-07 18:24:50

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Investing.com - The U.S. stock market fell on Tuesday as investors watched developments in the Middle East and prepared for the earnings season for the first quarter of 2026. The earnings season will kick off on Wednesday, with Delta Air Lines (NYSE:DAL) releasing results first.

Goldman Sachs said that the Strait of Hormuz is currently essentially closed to oil tankers, severely limiting global oil supply and raising concerns in the market about potential supply-chain shortages in the coming months. WTI crude oil prices surged, prompting investors to consider its impact on inflation and U.S. economic growth.

Goldman Sachs analyst Richard Ramsden said that as the market digests a weakening outlook for Federal Reserve rate cuts and loan growth remains strong, the banking sector is expected to see net profit growth in its first-quarter results. The firm recommended buying Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC). Hedge funds are reducing risk exposure, which could have a negative impact on some banks’ capital markets business later this year.

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