Daily Market Report – July 14, 2026

Market Report | July 14, 2026

The American earnings season has begun with a bang. While the five largest Wall Street banks reported predominantly significantly better results than expected, the development of US consumer prices also surprised positively. This combination boosted the stock markets, although the military conflict between the United States and Iran continued to drive up oil prices. For investors, the question increasingly arises as to which influence on the monetary policy of the Federal Reserve prevails: the easing inflation or the geopolitically induced risks to energy prices.

According to the U.S. Bureau of Labor Statistics, the increase in consumer prices slowed to 3.5% in June compared to the previous year, after 4.2% was recorded in May. Month over month, prices even fell by 0.4% – the strongest decline since spring 2020. This was primarily due to lower energy prices. Core inflation also developed more favorably than economists expected.

The reaction of the financial markets did not take long. The yields on ten-year US Treasury bonds (US10Y) declined, the dollar lost value against the major currencies, and expectations for another interest rate hike by the Federal Reserve noticeably decreased. However, the central bank is likely to consider today's inflation report in a broader context. With the recent attacks between the USA and Iran, the oil price has risen significantly again. If higher energy prices establish themselves permanently, the recently observable decline in inflation could quickly lose momentum. Additionally, today’s hearing of Fed Chairman Kevin Warsh before Congress provides insights into the monetary policy assessment.

However, the kickoff of the American earnings season received far more attention than the macro data. Traditionally, the large banks open the series of quarterly results, and their results are considered an important barometer for the state of the US economy. The figures from the second quarter show one thing above all: Business in the capital markets is experiencing a remarkable renaissance.

The strongest impression was once again made by JPMorgan Chase. The largest American bank increased its quarterly profit to around 21.2 billion dollars, significantly exceeding analysts' expectations. Growth drivers were not the classic lending business, but primarily investment banking as well as equity and bond trading. Fees from mergers, acquisitions, and initial public offerings rose sharply after the market for capital measures had noticeably revived in the spring. CEO Jamie Dimon also raised the outlook for net interest income – an indication that the lending business remains stable despite declining interest rate expectations.

Goldman Sachs also benefited from the return of large capital market transactions. Revenues in equity trading rose to a record level, while investment banking profited from an increase in merger activities as well as several large initial public offerings. Particularly, the billion-dollar initial public offering of SpaceX (SPCX) generated high issuance revenues across the industry. Goldman was among the leading syndicate banks and was thus able to achieve exceptionally high revenues in both the issuance business and trading.

A similar picture emerged at Bank of America, Citigroup, and Wells Fargo. All institutions benefited from an unusually high trading activity of institutional investors. The ongoing uncertainty about inflation, monetary policy, and geopolitical risks led asset managers to rebalance their portfolios more frequently – an environment from which especially the trading departments of large banks benefit. At the same time, the lending business remained solid, although the growth rates lagged significantly behind those of the capital markets business. Overall, this reveals a remarkable contrast: while the real economy is only expanding moderately, investment banking and securities trading are experiencing a significant revival.

For the further course of the reporting season, these figures hold significant relevance. Banks are at the beginning of nearly all major capital market transactions and are therefore often regarded as leading indicators for companies' willingness to invest. The fact that both M&A advisory and the issuance business are clearly growing again argues against the thesis of an imminent economic slowdown. At the same time, several CEOs warned that geopolitical tensions and a possible renewed acceleration of inflation could quickly change the environment.

Despite this, optimism prevailed in the stock markets. The S&P 500 (SPX) and the Nasdaq Composite (IXIC) rose, supported by the combination of declining inflation and strong corporate earnings. The Dow Jones Industrial Average (DJI) performed weaker, after IBM recorded its largest daily loss in many years with a disappointing earnings forecast.

On Wednesday, attention will once again turn to the American economy. The U.S. Bureau of Labor Statistics will publish the producer price index, which is likely to provide clues as to whether the decline in inflation continues at the upstream production stages. In addition, major players in the financial sector, Morgan Stanley and BlackRock, will be in the spotlight during the earnings season.