Goldman Sachs has beaten third-quarter profit estimates, posting $5.29 billion in profit as volatile markets fed a frenzy on its trading desks. The Wall Street giant's equity business surged 72 per cent to $6.44 billion, more than compensating for a softer fixed-income division — a result that sent its shares up around 4 per cent before the opening bell.
The results, reported on Tuesday, underline how turbulence has become the friend of the big trading banks: US equity markets swung through the quarter on the Federal Reserve's September interest-rate hike, rising fuel costs, the Middle East conflict and a selloff in chip stocks, and investors aggressively reshuffled portfolios — to the direct benefit of bank trading desks.
The numbers
Goldman posted profit of $17.01 per share for the three months ended 30 September, against $4.10 billion, or $12.25 per share, a year earlier. Analysts had expected $13.02 per share, according to LSEG data — a beat of more than 30 per cent. Total profit rose nearly 30 per cent year on year.
The engine was equities: revenue from the equities business jumped 72 per cent to $6.44 billion. By contrast, the fixed income, currency and commodities business came in at $3.47 billion, down 1 per cent from a year ago. FICC had been volatile all year — net revenue surged 32 per cent in the second quarter but had dropped 10 per cent in the first, when its rates business was hit by volatility from the Iran war.
Volatility as a business model
The quarter's market backdrop reads like a checklist of macro shocks. The Federal Reserve raised interest rates in September, fuelling swings in bond and equity markets. The Middle East conflict rattled energy and commodity prices. Chip stocks sold off violently — a move that began when the Broadcom boss's "casino" comment sank semiconductor names and intensified with China's CXMT memory breakthrough.
For Goldman, that chaos is revenue. When investors reposition aggressively, trading volumes spike and spreads widen, and the bank's market-making desks collect. Chief executive David Solomon said the bank had been expecting the softer FICC number after flagging it to investors earlier in the month — equities simply did the heavy lifting instead.
Investment banking holds steady
The dealmaking division navigated a brief slowdown. M&A activity in the third quarter fell 41 per cent from the prior three months to $993 billion, dropping below $1 trillion for the first time since the second quarter of 2025, LSEG data showed. Despite that, investment banking revenue held up — a clear beat relative to consensus, in the words of Argus Research analyst Stephen Biggar, demonstrating a pipeline of deal activity that should keep the revenue line elevated in coming quarters.
"Notwithstanding the current complexity and uncertainty in the world, we remain very well positioned to continue to deliver for our clients," Solomon said in a statement.
The bigger picture for Wall Street
Goldman's quarter is the latest evidence of a two-speed Wall Street: trading revenues supercharged by geopolitical and policy volatility, set against a dealmaking environment that remains hostage to uncertainty. The same forces rattling corporate treasuries — the Fed's hiking cycle, Middle East tensions, the semiconductor shakeout — are printing money for the banks that intermediate them.
