Goldman Sachs Chief Executive Warns of Trade War Material Risks as Bank Posts Record Equities Revenue

Goldman Sachs’ chief executive has issued a stark warning about President Trump’s tariffs, highlighting that the escalating trade war poses “material risks” to both the US and global economies.

David Solomon, at the helm of one of the world’s largest investment banks, emphasised that uncertainty levels have risen dramatically. Speaking on Monday, he noted that the bank’s economists had reduced their US economic growth forecasts to 0.5 per cent for the current year, whilst cautioning that recession prospects have heightened.

Despite these concerns, Goldman’s trading division capitalised on market volatility during the first quarter, with equities trading revenue soaring 27 per cent year-on-year to reach a record £4.2 billion. This surge was primarily driven by clients scrambling to reposition their portfolios following Trump’s January return to the White House.

The bank’s overall quarterly revenues climbed 6 per cent to £15.1 billion, marking its third-strongest quarter on record, while net profits exceeded expectations with a 15 per cent increase to £4.7 billion. However, the volatile market conditions have dampened merger and acquisition activity, resulting in an 8 per cent decline in investment banking fees to £1.9 billion.

Solomon’s cautionary stance echoes recent comments from JPMorgan Chase’s Jamie Dimon, who suggested that an American recession was becoming increasingly probable due to ongoing trade tensions. The mounting concerns from Wall Street’s leading figures reflect growing unease about the broader economic implications of escalating trade disputes.

Goldman Sachs shares responded positively to the results announcement, closing up 1.9 per cent at $503.98 in New York, outperforming a broader market recovery in US equities.