Goldman Sachs has announced a strong performance for the first quarter of 2025, posting net profits of $4.74 billion, up 15% from the same period last year. This marks a significant achievement for the firm, as revenues grew by 6%, reaching $15 billion. However, the company warned of ongoing challenges driven by global economic uncertainty, particularly due to escalating trade tensions.
Wall Street may be cashing in on chaos, but its top brass is sounding the alarm.
David Solomon, highlighted the pressing need for a pause to gain clarity on the ongoing uncertainties that are shaping the financial landscape. "My general message is to take a pause so we have more clarity around a lot of these issues," Solomon stated, urging caution in a volatile economic climate.
The turbulence surrounding global trade tensions and shifting economic policies has already sparked significant changes in currency markets. “There is enormous volume in currencies trading at the moment as people think about the dollar,” Solomon said, noting how this volatility is making its way into key financial markets. The dollar's shifting value is top of mind for investors and businesses alike, and its impact is felt globally.
Solomon also shared insights into the mood of business leaders, particularly outside the United States. "We're hearing a greater sense of short-term concern from CEOs outside the US," he said, reflecting growing anxiety as global economic conditions remain unpredictable.
Looking ahead, Goldman’s CFO, Stephen Scherr, offered a long-term view, stating that by the end of 2026, the firm intends to have significantly reduced its historic principal investments. "We would have sold down the vast majority of these investments," Scherr confirmed, pointing to a shift in Goldman’s investment strategy as the firm continues to navigate a complex global environment.
“We are entering the second quarter with a markedly different operating environment than earlier this year,” said David Solomon, Goldman Sachs’ CEO, on a call with analysts. “The prospect of a recession has increased.”
His words struck a sobering tone during the firm’s earnings call on Monday. While Goldman reported a strong first quarter—buoyed by a surge in trading revenue—Solomon made it clear that the path ahead looks far less certain.
“Our corporate and investing clients are concerned by the significant near-term and longer-term uncertainty that has constrained their ability to make important decisions,” Solomon said. “This uncertainty around the path forward and fears over the potentially escalating effects of a trade war have created material risk for the US and global economy.”
Stormy winds, tailwinds, and a tumbling deal market
Goldman Sachs managed to beat Wall Street expectations with a net profit of $4.74 billion—up 15% from the same period in 2024. Total revenue rose 6% to $15.06 billion, with equity trading revenue alone spiking 27% to $4.2 billion, driven by market volatility linked to President Trump’s new tariffs.
Despite the upbeat figures, investment banking was a drag. Advisory revenue from mergers and acquisitions fell sharply by 22%, to $792 million, as companies stepped back from major deals. Investment banking fees overall declined by 8% year-on-year. The so-called “deal backlog” remains high, but momentum is missing.
“Clients have become more cautious,” Solomon added. The bank sees markets staying volatile until more clarity emerges, and global growth is visibly slowing.
Trading boom, IPO bust
Goldman’s equities division had its best quarter since 2009, thanks to the chaos stirred by Trump’s “Liberation Day” tariffs. When Trump first unveiled sweeping levies in early April, the US stock market tanked. The abrupt U-turn—where tariffs against countries other than China were temporarily paused—only deepened the confusion.
This volatility fuelled trading activity and sent Goldman’s stock trading revenues surging. But other parts of the market seized up. IPOs and mergers stalled. Leveraged loan deals were sidelined. Bond sales halted.
Goldman’s performance reflects the bank’s ability to profit from turbulence—but the broader picture is worrying. “There are growing expectations economic activity is slowing around the world,” Solomon noted.
Wall Street’s warnings multiply
Goldman isn’t the only bank on edge.
JPMorgan CEO Jamie Dimon said last week the economy faces “considerable turbulence,” with investment banking clients hesitating amid geopolitical and trade uncertainties. At BlackRock, CEO Larry Fink told analysts: “The sweeping tariff announcements went further than I could have imagined in my 49 years in finance.”
“Uncertainty and anxiety about the future of markets and the economy are dominating client conversations,” Fink added.
Meanwhile, analysts at Morgan Stanley and Citigroup have slashed their year-end S&P 500 targets, citing unstable earnings, trade tensions, and unpredictable US policy under the returning Trump administration.
Cutbacks, compensation, and caution
Beyond the earnings figures, Goldman also flagged a $150 million severance charge in the second quarter due to ongoing job cuts. That comes amid scrutiny of executive compensation. Solomon and COO John Waldron were granted five-year, $80 million “golden handcuffs” bonuses—moves designed to keep the leadership duo in place.
Solomon, who earned $39 million last year, has faced criticism for the size of the payout, especially after reports surfaced that Waldron was considering a $500 million private equity role at Apollo Global Management.
Defenders argue the rewards are justified, pointing to Goldman’s surging profits and a share price up over 30% in the past year.
While Goldman’s Q1 results outperformed expectations, the road ahead is riddled with unknowns. Asset and wealth management revenues dipped due to poor equity and debt investments, despite stronger management fees. Hopes that the shift from the Biden to Trump administration would unlock dealmaking have not materialised.
Instead, the global economy appears to be slowing—and Wall Street is bracing.
“Our strong results demonstrate that in times of great uncertainty, clients turn to Goldman Sachs for execution and insight,” said Solomon. But even he seems unsure how long that will last.
As the firm eyes a murky second quarter, one thing is clear: the era of easy bets is over.
(With inputs from Reuters)
Wall Street may be cashing in on chaos, but its top brass is sounding the alarm.
David Solomon, highlighted the pressing need for a pause to gain clarity on the ongoing uncertainties that are shaping the financial landscape. "My general message is to take a pause so we have more clarity around a lot of these issues," Solomon stated, urging caution in a volatile economic climate.
The turbulence surrounding global trade tensions and shifting economic policies has already sparked significant changes in currency markets. “There is enormous volume in currencies trading at the moment as people think about the dollar,” Solomon said, noting how this volatility is making its way into key financial markets. The dollar's shifting value is top of mind for investors and businesses alike, and its impact is felt globally.
Solomon also shared insights into the mood of business leaders, particularly outside the United States. "We're hearing a greater sense of short-term concern from CEOs outside the US," he said, reflecting growing anxiety as global economic conditions remain unpredictable.
Looking ahead, Goldman’s CFO, Stephen Scherr, offered a long-term view, stating that by the end of 2026, the firm intends to have significantly reduced its historic principal investments. "We would have sold down the vast majority of these investments," Scherr confirmed, pointing to a shift in Goldman’s investment strategy as the firm continues to navigate a complex global environment.
“We are entering the second quarter with a markedly different operating environment than earlier this year,” said David Solomon, Goldman Sachs’ CEO, on a call with analysts. “The prospect of a recession has increased.”
His words struck a sobering tone during the firm’s earnings call on Monday. While Goldman reported a strong first quarter—buoyed by a surge in trading revenue—Solomon made it clear that the path ahead looks far less certain.
“Our corporate and investing clients are concerned by the significant near-term and longer-term uncertainty that has constrained their ability to make important decisions,” Solomon said. “This uncertainty around the path forward and fears over the potentially escalating effects of a trade war have created material risk for the US and global economy.”
Stormy winds, tailwinds, and a tumbling deal market
Goldman Sachs managed to beat Wall Street expectations with a net profit of $4.74 billion—up 15% from the same period in 2024. Total revenue rose 6% to $15.06 billion, with equity trading revenue alone spiking 27% to $4.2 billion, driven by market volatility linked to President Trump’s new tariffs.
Despite the upbeat figures, investment banking was a drag. Advisory revenue from mergers and acquisitions fell sharply by 22%, to $792 million, as companies stepped back from major deals. Investment banking fees overall declined by 8% year-on-year. The so-called “deal backlog” remains high, but momentum is missing.
“Clients have become more cautious,” Solomon added. The bank sees markets staying volatile until more clarity emerges, and global growth is visibly slowing.
Trading boom, IPO bust
Goldman’s equities division had its best quarter since 2009, thanks to the chaos stirred by Trump’s “Liberation Day” tariffs. When Trump first unveiled sweeping levies in early April, the US stock market tanked. The abrupt U-turn—where tariffs against countries other than China were temporarily paused—only deepened the confusion.
This volatility fuelled trading activity and sent Goldman’s stock trading revenues surging. But other parts of the market seized up. IPOs and mergers stalled. Leveraged loan deals were sidelined. Bond sales halted.
Goldman’s performance reflects the bank’s ability to profit from turbulence—but the broader picture is worrying. “There are growing expectations economic activity is slowing around the world,” Solomon noted.
Wall Street’s warnings multiply
Goldman isn’t the only bank on edge.
JPMorgan CEO Jamie Dimon said last week the economy faces “considerable turbulence,” with investment banking clients hesitating amid geopolitical and trade uncertainties. At BlackRock, CEO Larry Fink told analysts: “The sweeping tariff announcements went further than I could have imagined in my 49 years in finance.”
“Uncertainty and anxiety about the future of markets and the economy are dominating client conversations,” Fink added.
Meanwhile, analysts at Morgan Stanley and Citigroup have slashed their year-end S&P 500 targets, citing unstable earnings, trade tensions, and unpredictable US policy under the returning Trump administration.
Cutbacks, compensation, and caution
Beyond the earnings figures, Goldman also flagged a $150 million severance charge in the second quarter due to ongoing job cuts. That comes amid scrutiny of executive compensation. Solomon and COO John Waldron were granted five-year, $80 million “golden handcuffs” bonuses—moves designed to keep the leadership duo in place.
Solomon, who earned $39 million last year, has faced criticism for the size of the payout, especially after reports surfaced that Waldron was considering a $500 million private equity role at Apollo Global Management.
Defenders argue the rewards are justified, pointing to Goldman’s surging profits and a share price up over 30% in the past year.
While Goldman’s Q1 results outperformed expectations, the road ahead is riddled with unknowns. Asset and wealth management revenues dipped due to poor equity and debt investments, despite stronger management fees. Hopes that the shift from the Biden to Trump administration would unlock dealmaking have not materialised.
Instead, the global economy appears to be slowing—and Wall Street is bracing.
“Our strong results demonstrate that in times of great uncertainty, clients turn to Goldman Sachs for execution and insight,” said Solomon. But even he seems unsure how long that will last.
As the firm eyes a murky second quarter, one thing is clear: the era of easy bets is over.
(With inputs from Reuters)
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