Market Insider

Friday is an important test for the Trump rally

Could bank earnings derail rally?

The start of earnings season could test the Trump rally's endurance, at least in the short term.

Financials, which have led the market's gains, are the first out of the gate with earnings Friday, when the biggest U.S. banks release fourth-quarter results. JPMorgan Chase, Bank of America and Wells Fargo report, as does BlackRock. The S&P financial sector is up 17 percent since Election Day on the promise of higher interest rates and less regulation. Now earnings and their outlooks have to justify the gains.

"Between earnings and jockeying ahead of [Inauguration Day], clearly we think we could see some action in the big-cap names," said Ryan Detrick, senior market strategist at LPL Financial. Ryan said the market's 19-day streak of shallower than usual moves in the could be setting it up for some bigger move in either direction.