Goldman Sachs cashes in on stock market turmoil as bank posts $4.7B profit

Goldman Sachs cashed in on stock market turmoil from President Donald Trump’s looming tariffs with a record haul in the first three months — but CEO David Solomon warned of “material risks” to the economy if there is a global trade war.

The Wall Street giant on Monday was the latest big bank to announce strong earnings, posting net profits of $4.7 billion in the quarter ending March 31 on revenues of $15.06 billion.

Its trading division reported revenues of $4.2 billion, up 27% from the same period last year, as investors scrambled to remake their portfolios to mitigate the hit from the new tariffs.

“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 in a statement.

He went on to predict that “markets will continue to be volatile” until the administration provides clarity on what its final trade policy will be with global partners.

“Uncertainty about the path forward and fears over the potentially escalating effects of a trade war have created material risks for the US and global economy,” Solomon said.

“The prospect of a recession has increased with growing indications that economic activity is slowing around the world.”

Solomon’s warning comes just days after his crosstown rival Jamie Dimon at JPMorgan sounded the alarm that a global trade war would create “considerable turbulence” for this country’s economy.

Trump’s reciprocal tariffs plan led to a widespread sell-off on Wall Street after he announced the “Liberation Day” rollout at the White House on April 2.

But the administration reversed course hours after the stiff tariffs kicked in last Wednesday, announcing a 90-day pause for all nations except China.

Solomon praised Trump for the U-turn.

“We are encouraged by the administration’s recent actions to pursue a more gradual policy process that allows for considered negotiations with many countries,” he said during the earnings call.

“The administration’s focus on trade barriers and strengthening the US competitive position is commendable.”

But the bank’s much-vaunted ‘Trump bump’ that had led to a brief uptick in dealmaking after his resounding election victory over Kamala Harris looks to be over.

The financial giant said its investment banking fees dropped by 8% to $1.9 billion, but Solomon said talks about further M&A deals were ongoing.

“Obviously, if the landscape got more constrained, there’s a risk of it slowing,” he said.
Goldman’s shares have fallen 12% since the tariffs were unveiled earlier this month, while JPMorgan and Morgan Stanley are 4% and 9% lower, respectively.

Last week, JPMorgan, Morgan Stanley and Wells Fargo all reported better-than-expected profits.

There was some troubling news for Goldman. Its revenue asset and wealth management arm, the unit that caters to institutions and high net-worth individuals, fell 3% to $3.68 billion due to losses on equity and debt investments.

Solomon, who raked in $39 million in compensation last year, and his second-in-command, chief operating officer John Waldron have faced heat from some Wall Street observers after both received a five-year $80 million golden handcuffs bonus.

The eye-popping sums, which are subject to being signed off by the bank’s compensation committee, were seen as a play to keep Solomon and Waldron with the firm.

Last month, the Financial Times reported that Waldron was eyeing a $500 million job in private equity with Marc Rowan’s Apollo Global Management.

Defenders of the payouts have likewise pointed to Goldman’s surging profits, which have sent its share price rocketing by more than 30% over the past year.