Investment banking fees slowed at Goldman Sachs (GS) in the first quarter even as overall revenues and profits increased, in a sign of how challenging 2025 is turning out to be for some of the biggest names on Wall Street.
Goldman Sachs CEO David Solomon warned of more challenges to come, saying in a statement Monday that “we are entering the second quarter with a markedly different operating environment than earlier this year” — an apparent nod to the uncertainties triggered by President Trump’s aggressive slate of new tariffs.
“We remain confident in our ability to continue to support our clients.”
Overall profits at Goldman Sachs rose 15% from the year ago period to $4.74 billion. Revenues rose 6%, to $15 billion.
But dealmaking pulled back. Fees from investment banking dropped 8% from the year-ago period. Advisory revenues earned from helping companies with mergers and acquisitions were down 22%, lower than what analysts expected.
One bright spot was trading, as Goldman benefitted from the volatility surrounding the initial discussion of Trump’s first tariffs in February and March. Equity trading rose a record 27%, and total trading revenue was $8.59 billion, Goldman’s best quarter since it earned $10 billion in the middle of 2009.
Some of Goldman’s rivals on Friday also offered several warnings about the economic uncertainties ahead.
JPMorgan Chase (JPM) CEO Jamie Dimon said the economy faces “considerable turbulence,” even as his bank reported a rise in first quarter profits, and that investment banking “clients have become more cautious amid an increase in market volatility driven by geopolitical and trade-related tensions.”
BlackRock (BLK) CEO Larry Fink told analysts “the sweeping tariff announcements went further than I could have imagined in my 49 years in finance,” and warned the implications could be widespread.
“Uncertainty and anxiety about the future of markets and the economy are dominating client conversations.”
At close: April 11 at 4:00:02 PM EDT
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The signs of stress on Wall Street have certainly been mounting in the last week. IPOs and mergers were put on the shelf. Leverage loan deals were shoved to the sidelines. Bond sales were paused.
Wall Street is also reckoning with other forms of chaos that still have the potential to roil the financial system.
The Financial Times reported this week that hedge funds were receiving the steepest margin calls since the 2020 COVID-19 crisis, meaning Wall Street banks were asking them to come up with cash to cover losses. That may have triggered more fire sales of losing positions.