Goldman Sachs delivered a remarkable Q3 2026 performance, posting EPS of $17.01 that beat the $13.09 consensus by nearly 30%. The bank's shares rose nearly 1% in late-morning trading following the earnings announcement. Net profit surged to $5.29 billion compared with $4.10 billion in the corresponding period a year earlier, representing a significant year-over-year improvement. Net revenue rose 23% to $18.68 billion, driven primarily by exceptional trading performance. Its equities desk, which trades stocks for hedge funds and other large clients, brought in $6.44 billion with stock-trading revenue jumping 72%. The bank benefited from resilient dealmaking and increased equities trading revenue amid market volatility linked to the Middle East conflict. Bond trading revenue declined, but the equities surge more than compensated. The Wall Street bank also navigated a slowdown in mergers and acquisitions, with global M&A activity falling 41% from the previous quarter to $993 billion, slipping below the $1 trillion mark for the first time since Q2 2025. Goldman CEO David Solomon noted on an analyst call that "The economy continues to be very, very resilient despite some of the headwinds," citing an extraordinary tech supercycle and encouraging regulatory environment.
Citigroup also delivered strong results, beating Q3 EPS estimates by 7.55% with $2.85 against a $2.65 consensus, extending a trend of topping consensus EPS estimates in each of the last four quarters. Revenue rose 8% to $23.8 billion, marking its best third quarter in a decade, with stock-trading revenue rising 14% on prime brokerage where client balances grew more than 40%. However, Wells Fargo reported Q3 EPS of $1.87, beating the $1.85 consensus by $0.02, but revenue of $21.87 billion fell roughly 2% short of the $22.31 billion estimate, with net interest income at $12.52 billion also missing forecasts. JPMorgan Chase delivered Q3 EPS of $5.57, missing the $5.85 consensus by roughly 5%, with revenue of $50.17 billion against a $51.23 billion forecast. JPMorgan's CFO Jeremy Barnum told reporters that "the deals pipeline remained very strong," despite market volatility dampening dealmaking activity. Citigroup CFO Gonzalo Luchetti said the bank saw softer investment banking activity in the third quarter, while Wells Fargo CFO Mike Santomassimo noted a September slowdown, with the big jump in the benchmark 10-year yield having an effect.
The broad attribution of Goldman's Q3 upside points to equities and fixed-income desks, both of which benefited from elevated market volatility and client activity in the first half of 2026. Bond trading was flat, but the equities desk's exceptional performance more than compensated. Analysts will parse what drove the surge from the earnings call transcript and supplement disclosures, with the key question being whether those tailwinds persisted through September. Whether management describes the Q4 deal pipeline and client activity levels will be the central takeaway for investors holding GS through year-end. Even after the jump, Goldman remains well below its 52-week high of $1,153.99, leaving room for further rerating if trading momentum holds. The Financial Select Sector SPDR ETF (NYSE:XLF) reflects this divided picture, with trading-oriented franchises like Goldman performing well while consumer and commercial lenders face revenue growth challenges.
Despite strong earnings beats, bank stocks are facing significant selling pressure. Jim Cramer noted that earnings beats failed to lift bank stocks, with Morgan Stanley falling nearly 3% on Wednesday after its revenue grew 12% and topped forecasts. Goldman Sachs also lost another 1.5% on Wednesday, even though it beat estimates. Cramer attributes the sell-off to worries about sticky inflation and climbing rates, not weak results. Morgan Stanley's third-quarter revenue rose to $20.3 billion from $18.2 billion a year earlier, with Institutional Securities growing 18% to $10 billion. However, fixed income fell short of expectations with a 7% decline, while wealth management revenue rose 10% and client assets across wealth and investment management reached a record $10.5 trillion. Chief Executive Ted Pick told CNBC he is cautiously optimistic about the fourth quarter, though Cramer noted it's "not easy to own these bank stocks right now." Cramer's Charitable Trust portfolio upgraded Wells Fargo and Goldman Sachs to buy-equivalent ratings, as he expects a resolution to the Iran war could cool inflation and give the Federal Reserve room to back off rate hikes.
Wall Street's biggest banks are expected to unveil a quarterly stock-trading haul of nearly $19 billion when earnings are reported. Goldman Sachs Group Inc. is expected to lead with $5.1 billion in stock-trading revenue, followed by Morgan Stanley at $4.9 billion, according to analyst estimates compiled by Bloomberg. JPMorgan Chase & Co. is forecasted at $4.5 billion and Bank of America Corp.'s equity traders at $2.6 billion. However, analysts remain divided on the outlook, weighing potential relief rallies against macroeconomic risks and growing concerns over credit affordability. Lending is expected to see a spike from a year earlier, while credit quality is likely to remain broadly stable, though banks face pressure from rising borrowing costs. The more useful signal is in how the banks made their money, with stock trading booming while bond trading slipped at JPMorgan and Wells Fargo's lending income missed despite strong loan growth, all signs that higher rates are starting to bite. JPMorgan's markets division revenue climbed 15% in the third quarter from the prior year, with equity markets revenue surging 49%, as clients rejigged their portfolios on the back of rates uncertainty and surging energy prices.
