Goldman Sachs (GS) reported stronger-than-expected first-quarter earnings on Monday, powered by surging trading revenue amid turbulent financial markets.
The Wall Street giant posted a 15% year-over-year increase in profit, reaching $4.74 billion, or $14.12 per share—well above analysts' forecasts of $12.33. Revenue climbed to $15.06 billion, up 6% from the same period last year.
The firm’s trading desks capitalized on sharp market swings sparked by the White House’s sudden imposition of new tariffs. Total trading revenue rose to $8.59 billion, the bank’s highest quarterly figure since 2009. Equities trading jumped 27%, while fixed-income, currencies, and commodities (FICC) revenue grew 2% from a year earlier and 61% from the previous quarter. The firm also posted record revenues in both equities and FICC financing.
Shares of Goldman Sachs rose nearly 2% in early trading Monday following the release.
Dealmaking Slows as Clients Grow Cautious
While Goldman’s trading units thrived, the firm’s investment banking arm saw activity slow. Advisory fees, particularly from mergers and acquisitions, plunged 22% from a year earlier. Total investment banking revenue dropped 8%, underperforming expectations and underscoring a broader pullback in corporate dealmaking.
“We are entering the second quarter with a markedly different operating environment than earlier this year,” CEO David Solomon said in a statement. Speaking to analysts, he cited increased client caution in response to macroeconomic uncertainty, warning that “the prospect of a recession has increased.”
That caution has translated into delays or cancellations of deals across Wall Street. Initial public offerings, mergers, and leveraged loan transactions have largely been sidelined. Goldman’s asset and wealth management division also saw a modest revenue decline, slipping 3% year-over-year to $3.68 billion.
Trade Tensions and Recession Fears Cloud the Outlook
The mixed results reflect the dual forces reshaping Wall Street in 2025: heightened volatility benefiting traders, and growing geopolitical risks unsettling corporate boardrooms. President Trump’s aggressive trade policies—imposing tariffs on China, Mexico, and other major partners—have jolted markets and shaken investor confidence.
In remarks to analysts, Solomon noted that while the administration’s focus on strengthening U.S. competitiveness is “commendable,” the uncertainty generated by shifting trade strategies is weighing on clients. “Few companies have benefited more from the post-World War II economic and financial order than the U.S.,” he added, cautioning that disruption to this system could have lasting consequences.
Goldman economists have slashed their U.S. growth forecast from over 2% to just 0.5%. Meanwhile, other financial leaders echoed concerns. JPMorgan Chase (JPM) CEO Jamie Dimon warned of “considerable turbulence,” and BlackRock's (BLK) Larry Fink described the tariff announcements as the most sweeping he’s seen in nearly five decades.
Despite a strong quarter, Goldman’s stock is down 14% year-to-date, lagging behind the S&P 500’s 8.6% decline. The outlook remains clouded by the uncertain trajectory of trade negotiations and the looming risk of a broader economic slowdown.
Still, Solomon struck a cautiously optimistic note, suggesting that “a more gradual policy process” could pave the way for stability. But as the second quarter unfolds, the path forward for Goldman and its peers remains anything but clear.
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