Stock prices for major U.S. financial institutions, including Goldman Sachs and Wells Fargo, have declined in 2026 amid investor concerns linked to geopolitical conflict, the economic implications of artificial intelligence, and the stability of the private credit market. As of mid-March, shares of Goldman Sachs have fallen 11% year-to-date, while Wells Fargo shares have decreased by more than 20%.
Market analysts are monitoring several factors contributing to the downturn in the financial sector. The ongoing conflict involving Iran has raised concerns about its potential impact on global oil prices and, consequently, inflation and economic growth.
In a recent interview with CNBC, Bank of America research analyst Ebrahim Poonawala noted that such a situation “does increase the probability of downside risks.” Poonawala stated that a stagflationary environment—characterized by slow economic growth, high inflation, and high unemployment—could lead to a slower growth outlook for banks and an increase in loan defaults.
The potential effects are distributed differently across institutions based on their business models. According to its most recent quarterly report, Goldman Sachs’ global banking and markets division, which includes dealmaking fees, accounted for approximately 77% of its total revenue. In contrast, Wells Fargo’s corporate and investment banking division made up 21% of its overall revenue in the last quarter, with a larger portion of its business tied to interest-based income from lending.
Another factor cited in market discussions is the potential disruption from artificial intelligence. A report from Citrini Research outlined a scenario in which increased AI adoption could lead to higher unemployment by 2030, potentially impacting economic growth and consumer spending. In response to technological developments, financial firms have made investments in AI. A February CNBC report stated that Goldman Sachs has been working with the AI company Anthropic. In January, Wells Fargo appointed Faraz Shafiq to lead its AI products and solutions division.
Developments in the private credit market have also drawn scrutiny. In recent months, asset managers including Blue Owl, Blackstone, and BlackRock reported elevated redemption requests from certain private credit funds. These funds often borrow from large banks to finance their lending activities.
However, some experts maintain that the banking sector has significant buffers against potential issues in private credit. Tomasz Piskorski, a professor at Columbia Business School, told CNBC that banks are “reasonably well protected.” He explained that private credit funds are typically financed with a higher ratio of equity to debt compared to traditional banks.
“That means that the asset value would have to drop way more than half before the banks … lending to the private credit funds will be impaired,” Piskorski said, noting the capital buffers are designed to protect lenders. He added that the primary exposure is held by the limited partners who provide equity to the funds, not the banks that provide debt financing.
