Goldman Sachs Group Inc

Wall Street's biggest banks are heading into third quarter earnings after one of their most profitable six-month runs in at least a decade, but sharply rising interest rates now threaten that boom. JPMorgan Chase, Goldman Sachs, and Citigroup report on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday, with investors hunting for clues on whether higher rates are beginning to spoil the first-half surge. Profits at these giants are expected to fall from last quarter as trading, dealmaking, and financing revenues retreat from the standout second quarter levels, according to analyst estimates compiled by Bloomberg, though most are still expected to show profits up from a year ago, with Bank of America and Morgan Stanley the exceptions. Collectively, the five banks have shed about $270 billion in market value from their respective summer highs through Friday's close, even as the S&P 500 remains up roughly 14% this year, and a Truist Securities survey earlier this month found just 35% of institutional investors expect bank stocks to outperform the broader market, down from 68% in July and 82% in December. The key focus is less on what higher borrowing costs mean for third quarter profits than on whether the rapid repricing of money will undermine the unusually strong activity that defined 2026's first half, with trading results expected to bring the most immediate evidence of a slowdown after bank executives telegraphed softer September activity, particularly in fixed income. Higher financing costs also raise the stakes for whether this year's investment banking surge can continue into 2027, as several companies including smart ring maker Oura have postponed public listings and Nvidia-backed Firmus Grid abruptly shelved its listing plans this week after investors balked at its proposed valuation, while global merger and acquisition deal announcements slowed sharply during the third quarter.

Goldman Sachs stock has fallen in 10 of the past 12 weeks, erasing nearly all of its 2026 gains just days before its third quarter earnings release. Shares were up less than 1% for the year as of Thursday morning, down more than 20% from their July peak. The retreat comes as a sharp rise in government bond yields over the past month has pushed up borrowing costs, threatening to complicate major deals and cool demand for corporate financing. CEO David Solomon said at a September Barclays conference in New York that Goldman's fixed income, currencies, and commodities trading and financing operations have been a little bit softer on a relative basis, and announced mergers and acquisitions deals globally slowed sharply during the third quarter. The pressure extends beyond Goldman, with US bank stocks broadly retreating as investors reassess the outlook for lending, trading, and the overall economy amid a new era of interest rate hikes. Third quarter bank earnings begin on Tuesday.

The US trade deficit widened 13.7% in August from the previous month to $105.6 billion, the highest in 17 months since March 2025 and above the $102 billion forecast in a Reuters survey. The US Commerce Department said August imports rose 4.3% to a record $420.8 billion, with goods imports up 5.3% to $342.2 billion, partly as businesses rushed to restock inventories after five consecutive quarters of declines. Imports of capital goods rose $6.2 billion to a record $146.4 billion, driven by semiconductors and industrial machinery, reflecting accelerated investment in AI infrastructure. The latest deficit figure is also higher than at the time President Donald Trump won a second term in November 2024, when the deficit stood at $79.8 billion, even as Trump presses ahead with aggressive import tariff policies and the US continues to run trade deficits with at least three countries, including Mexico. Analysts assess that US production capacity is insufficient to meet domestic consumption demand, with Goldman Sachs cutting its third-quarter GDP growth estimate to 3.1% at an annualized rate from a previous forecast of 3.4%, while the US economy grew 2.2% in the second quarter.

Citigroup has risen to become the world's number one bank for advising and underwriting initial public offerings in the first nine months of 2026, overtaking Goldman Sachs after playing a role in several large deals in both Asia and the United States. Data compiled by Bloomberg shows that Citi holds the top spot in the global IPO underwriter rankings through the end of September, edging slightly ahead of Goldman Sachs, while Goldman Sachs remains number one when looking at equity offerings overall, which includes other transactions such as block trades and follow-on offerings. One of the key deals that helped propel Citi was the listing of the National Stock Exchange of India, or NSE, on the Mumbai stock exchange in September, raising 2.4 billion dollars, one of the largest IPOs in Indian history. Citi also served as Lead Global Coordinator for the listing of SK Hynix on the Nasdaq in July, with an offering value of as much as 26.5 billion dollars, the largest ever U.S. equity offering by a foreign company, and it played a role in SpaceX's landmark IPO in June, which had an offering value of as much as 86 billion dollars. The success comes as Citi pushes ahead with expanding its investment banking team worldwide, adding dozens of senior bankers, including in the Equity Capital Markets team, which handles direct fundraising through the stock market. In the past year, Citi brought in Charlie Black from Goldman Sachs as head of Technology ECM for North America, and appointed Bernal J. Vargas III, who moved over from JPMorgan Chase, as head of ECM for North America. Citi also appointed Rob Chan as head of ECM Syndication for Asia.

Chicago multifamily developer Newstreet Properties has acquired a seven-story office building at 1165 North Clark Street in the Gold Coast for $6.8 million, with plans to convert it into an 80-unit apartment complex. Newstreet, recently rebranded from Initium Development, bought only the vertically-separated office portions of the building, totaling 74,500 square feet and excluding the ground-floor retail and parking, according to development director Alex Milanoski. The seller, Goldman Sachs, had paid $22.8 million for the entire 110,000-square-foot building in 2015, and separately sold the roughly 18,000-square-foot ground-floor retail space to YFP for $21.3 million in 2022. The deal was financed with a mix of equity and a $5.5 million loan from Chicago-based CRE Bridge Capital, with Newstreet and an anonymous equity partner contributing the remaining $1.3 million. It marks the firm's first office-to-residential conversion, following a year of talks with Goldman Sachs, and Newstreet hopes to start construction by June 2027 with a 12-to-13-month move-in timeline; Eckenhoff Saunders is the architect.