Goldman Sachs posts 15% profit surge amid market volatility

Goldman Sachs earnings grew 15% in the first quarter, fueled by stock traders who capitalized on volatile markets to gain record-breaking profits on equities, but its CEO warned of a problematic environment ahead.

Strong Trading Performance Drives Q1 Gains

Goldman Sachs reported a 15% rise in profit for the first quarter of 2025, driven primarily by its equities traders who capitalized on volatile markets to deliver record revenue. The Wall Street giant joins JPMorgan Chase and Morgan Stanley in posting stronger earnings, even as clouds gather over the broader economic outlook.

CEO Flags Challenging Road Ahead

Despite the solid results, CEO David Solomon offered a cautious outlook:

“While we are entering the second quarter with a markedly different operating environment than earlier this year, we remain confident in our ability to continue to support our clients,” Solomon said, acknowledging the “great uncertainty” that defined the first quarter.

Also read: BlackRock AUM surges to $11.58T despite dip in net income

Q1 Financial Highlights

Net profit: $4.74 billion, or $14.12 per share, up from $4.13 billion, or $11.58 per share, a year ago
Equities trading revenue: Jumped 27% to $4.2 billion (a new record)
Fixed income, currency & commodities (FICC) revenue: Rose 2% to $4.4 billion
Investment banking revenue: Fell 8% to $1.9 billion, primarily due to lower advisory fees
Share price movement: Up 1% in pre-market trading to $500.30

Tariffs Spark Trading Activity but Hit Investment Banking

Investor anxiety over newly announced tariffs—and their potential to spark inflation or trigger a recession—drove much of the trading activity. Many scrambled to restructure portfolios, helping boost Goldman’s trading business.

However, the uncertainty has taken a toll on investment banking, particularly M&A activity and initial public offerings, which remain subdued. The S&P 500 is down about 9% this year, further dampening deal momentum.

Outlook for Investment Banking

Industry experts note that investment banking may be down, but not out.

“I don’t think investment banking is dead. It’s just going to be slower, and certainly it’s not going to be as robust,” said Chris Marinac, director of research at Janney Montgomery Scott.

Sector Sentiment Shifts Amid Political and Economic Jitters

Investor sentiment has shifted dramatically in recent weeks. Just months ago, Wall Street was buoyed by Donald Trump’s return to the White House, but optimism has faded quickly following the announcement of tariff measures.

Since the new tariffs were unveiled: