Goldman Sachs Warns Of 'Material Risks' To US And Global Economy Amid Trade War, As Record Equity Revenue Drives Strong Q1 Results

After reporting better-than-expected first quarter results, Goldman Sachs Group Inc. GS highlighted in its earnings call that the bank navigated the market volatility with record equity revenue and warned about “material risks” to the U.S. and global economies amid the ongoing trade war.

What Happened: Goldman Sachs navigated a quarter of “rapidly shifting sentiment” to deliver robust first-quarter 2025 results, highlighted by a record $4.2 billion in equities net revenue, according to its Chairman and CEO, David Solomon.

The firm capitalized on market volatility, driven by policy uncertainty and repositioning by clients, to achieve strong performance in its Global Banking & Markets division. Solomon emphasized the strength of their global franchise and risk management capabilities in supporting client needs during this period.

While the trading desks thrived, the firm also sounded a note of caution regarding the broader economic outlook amid the ongoing tariff battle driven by U.S. trade policies under President Donald Trump‘s administration. Solomon highlighted growing concerns among clients, including corporate CEOs and institutional investors, about the “significant near-term and longer-term uncertainty” stemming from potential trade wars.

He specifically noted that these fears pose “material risks to the U.S. and global economy,” even as the administration pursues a more gradual policy process.

Despite the volatile backdrop impacting investment banking activity, Goldman Sachs maintained its leading position in mergers and acquisitions for the 20th consecutive year, with a growing backlog suggesting potential for future dealmaking.

The Asset & Wealth Management division also saw continued growth, with assets under supervision reaching a record $3.2 trillion and a 29th consecutive quarter of long-term fee-based net inflows.

Why It Matters: Revenue of $15.06 billion, up 6% year-over-year, beat the consensus of $14.81 billion. Net interest income rose to $2.90 billion, up from $1.37 billion a year ago quarter, and it recorded earnings of $14.12 per share, beating the consensus of $12.35.

Looking ahead, Goldman Sachs acknowledged the “markedly different operating environment” entering the second quarter, with GS economists significantly downgrading U.S. growth expectations from over 2% to 0.5%, while also increasing recession probabilities.

Price Action: Goldman Sachs stock ended 1.93% higher at $503.98 on Monday, while the SPDR S&P 500 ETF Trust SPY, tracking the S&P 500 index, rose 0.97%.

GS was down by 12.35% on a year-to-date basis, whereas it was up 25.72% over a year.

Benzinga Edge Stock Rankings indicate that GS has a weaker price trend over the short, medium, and long term. Its momentum ranking was solid at the 85.89th percentile, whereas its growth and quality rankings were moderate. More details on the fundamentals are available here.

Benzinga’s analysis of 23 analysts shows a consensus “buy” rating for the stock, with an average price target of $534.64, ranging from $351 to $760. Recent ratings from JMP Securities, JP Morgan, and Evercore ISI Group average $602.67, suggesting a 20.04% potential upside.