Goldman Sachs earnings show big banks are booming on market chaos

Goldman Sachs reported a stronger-than-expected second quarter Wednesday, with earnings per share of $10.91 on $14.58 billion in revenue, handily beating Wall Street’s forecast and sending shares up almost 1% ahead of the market open.

The results were powered by a 24% year-over-year surge in Global Banking & Markets revenue, including significant highs in equities trading and strong performance in M&A advisory. But even as he acknowledged the win, CEO David Solomon struck a note of caution, highlighting that while the macro backdrop appears favorable, “developments rarely unfold in a straight line.”

The line echoes recent comments from JPMorgan CEO Jamie Dimon, who on Tuesday flagged “a number of uncertain forces,” including “tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits, and elevated asset prices.” It also echoes sentiments recently voiced by Jerome Powell, chair of the Federal Reserve, who’s said that he expects the effects of President Donald Trump’s tariffs to filter through the system through the summer and fall.

Volatility = volume, rising market lifts bank boats

Trading desks across Wall Street have benefitted from the market volatility that followed Trump’s “Liberation Day” announcement in early April, and the series of tariff threats and reversals which have followed since.

It’s a “volatility equals volume” pattern that’s clearly proving reliable into the second quarter —even if Q2 didn’t match Q1’s blockbuster levels. Goldman’s Fixed Income, Currency and Commodities revenue rose 9% over last year, while equities surged 36%. Investment banking fees jumped 26% amid a rebound in dealmaking, especially in M&A, again echoing a similar result investors saw yesterday in JPMorgan results.

Asset and wealth management was a softer spot, down 3% year-over-year, though client assets hit a record $3.29 trillion. Goldman’s once-expansive consumer finance ambitions remain a drag, with Platform Solutions posting a net loss and credit card charge-offs staying elevated at 6.1%.

The firm once had hopes for its consumer-finance division (Marcus, the Apple Card partnership, etc), but has been quietly pulling back from those ambitions for several years. Essentially, the business line’s initial promise has given way to expensive, operationally complex, and insufficiently profitable realities — a bad fit for Goldman’s high-ROE, capital-light culture. The high charge-offs now suggest that credit consumers outside the prime category may be feeling the pain of rising inflation and job-market uncertainty.

Big banks’ banner week continues

Goldman’s earnings beat follows upbeat results from JPMorgan, Wells Fargo, Citi, and BlackRock on Tuesday, where trading, deal activity, and the insulated finances of high-income households buoyed the top and bottom lines

Taken together, the results reflect a Wall Street (and a nation) that’s still thriving at the top, even as the broader economy begins to feel the macro burn.