Goldman Sachs' Earnings Momentum at Risk Amid Softer FICC Trading
The Goldman Sachs Group, Inc.'s third-quarter 2026 outlook hints at pressure on its Global Banking & Markets performance due to softer fixed-income trading and higher expenses. CEO David Solomon pointed out relatively slower activity in fixed income, currencies, and commodities (FICC) during a recent conference. However, he noted that equity trading has been very strong in the third quarter.
The moderation in FICC follows a strong first half of 2026, with Goldman generating $6.24 billion in IB fees, up 52% year over year, supported by robust advisory and underwriting activity. FICC revenues totaled $8.60 billion, rising 9%, while Global Banking & Markets revenues climbed 35% year over year to $28.26 billion.
The softer FICC backdrop is worth watching because trading remains a key contributor to Goldman's Global Banking & Markets revenues and provides earnings diversification, alongside investment-banking fees. Weaker fixed-income trading in the third quarter could reduce the incremental revenue support from Markets, though continued strength in equities should provide a partial cushion.
At the same time, rising operating costs could limit the extent to which strong deal activity translates into earnings growth. Solomon indicated that expenses are running higher amid elevated transaction volumes and accelerated technology investments. Non-compensation expenses are expected to increase by more than $500 million sequentially in the third quarter of 2026.