Financials Stocks Are Charging Into Q2 Earnings. Why Wall Street Sees More Gains Ahead

Financial sector stocks are ripping into their second quarter earnings reports. Wall Street analysts think the strength is justified. The S&P 500 Financials Sector is up more than 8% in the past month, neck-and-neck with healthcare as the best-performing sector during the period. Over the past three months, the sector’s 13% return puts it behind only the tech sector, up 23% due to April and May’s blistering chip stock rally.

“I am bullish on banks,” Mark Mayo, bank analyst at Wells Fargo, told CNBC on Tuesday. “I think this will be the third year in a row that bank stocks outperform the market.” Mayo and other Wall Street analysts argue strong capital markets activity and a resilient economy boosting commercial loan growth are likely to drive earnings beats for the U.S. banks that kick off second-quarter earnings season next week.

Big banks will get the second round of 2026 earnings reports started when they post results next week. Wall Street expects broadening benefits of the AI data center buildout to fuel another strong quarter for corporate America. Big banks are in the midst of a “multi-year [earnings per share] inflection,” wrote Mayo in a note on Monday. He argues large lenders are less than halfway through a four-year growth cycle, and expects the group to report earnings increased nearly 20% last quarter. Revenue is expected to grow more than 10%, driven by higher net inte...