Wells Fargo (NYSE:WFC) shares experienced a significant plunge of 6.86% in Thursday's trading session, as investors brace for the bank's upcoming first-quarter earnings report scheduled for April 11. The sharp decline comes amid growing concerns about the banking sector's outlook and analyst predictions of a cautious tone from major U.S. banks.

According to recent analysis, Wells Fargo and other big banks are expected to strike a cautious tone during their earnings calls, focusing on risks associated with policy uncertainties and potential economic challenges. While major credit issues are not anticipated immediately, there are indications that banks may increase their reserves due to growing economic concerns. Adding to the pressure, JPMorgan has adjusted its price target for Wells Fargo to $73.50 from $82, maintaining a neutral rating.

Investors will be closely watching the upcoming earnings call for signs of consumer and corporate strength, particularly in investment banking and lending activities. The market reaction suggests that traders are positioning themselves defensively, anticipating potential challenges in the banking sector for the remainder of 2025. Wells Fargo's significant stock decline reflects investor anxiety ahead of the critical earnings announcement and the broader cautious sentiment surrounding the financial sector.