Goldman Sachs posts biggest stock-trading bonanza in Wall Street history

By: James F.

Goldman Sachs posted the largest quarterly stock-trading bonanza in its history, as banks across Wall Street bagged fat profits from markets roiled by uncertainty over President Trump’s tariffs.

The financial giant’s trading desks notched $4.3 billion in revenue for the second quarter – about $600 million above analysts’ forecasts – with some insiders citing savvy bets surrounding the so-called “TACO trade” – or wagers that “Trump Always Chickens Out” on his tariff threats.

Rivals JPMorgan and Morgan Stanley also reaped windfalls as big hedge fund clients reshuffled their portfolios. Citigroup’s trading division saw its best quarterly results in five years, with CEO Jane Fraser saying volatility will be “a feature, not a bug, of the new world order, and we will benefit from that.”

On a Wednesday earnings call, Goldman Sachs CEO David Solomon called the tariff turmoil “a super interesting highly uncertain environment.”

Morgan Stanley also beat Wall Street estimates in the second quarter as its traders cashed in on volatile markets. Equities trading revenue surged 23%, while it jumped 9% in fixed income, Morgan Stanley said on Wednesday.

“The second quarter unfolded with two distinct halves,” Morgan Stanley CEO Ted Pick told analysts. “The first half began with uncertainty and market volatility associated with the U.S. trade policy, and the second half ended with increasing engagement and a steady rebound in capital markets.”

Goldman posted a $3.72 billion profit for the period ending June 30. That amounts to earnings of $10.91 per share, blowing past the estimate forecast by analysts at the London Stock Exchange Group of $9.53 per share.

The firm’s investment banking fees stood at $2.19 billion, rising 26% from a year ago and indicating that the bank has a healthy deals pipeline to see out the rest of 2025. Analysts were expecting a 10% jump.

The strong results could be seen as a vindication for the move to award Solomon and his loyal lieutenant, chief operating officer John Waldron, $80 million golden handcuffs bonuses earlier this year.

Goldman’s share price has surged more than 22% since the start of 2025, and stood at $704.71 per share in afternoon trading on the New York Stock Exchange.

“At this time, the economy and markets are generally responding positively to the evolving policy environment. But as developments rarely unfold in a straight line, we remain very focused on risk management,” he added in a thinly-veiled reference to the ongoing uncertainty from President Trump’s trade and tariff policies.

Morgan Stanley posted net income of $3.5 billion, or $2.13 per share, for the three months ended June 30. That compares with $3.1 billion, or $1.82 per share, a year earlier.

Morgan Stanley’s investment banking revenue fell 5% in the quarter, lagging rivals including Goldman and JPMorgan Chase.

Chief Financial Officer Sharon Yeshaya said some deals were delayed during the most volatile period of the second quarter.

It followed President Trump’s initial announcement of his Liberation Day import tariffs in early April.

But the bank is optimistic about the environment now.

“Corporations are looking past tariffs to lead their companies through strategic movements and growth,” Yeshaya said.