Goldman Sachs Revenue Increased by 72% in Q3

In the third quarter, Goldman Sachs reported a 72% year-over-year increase in equity trading revenue, reaching $6.44 billion. Meanwhile, JPMorgan Chase fell short by more than $500 million from its bond department's revenue forecasts. Rising rates did not aid bond trading, even though the yield on 10-year Treasury notes held around 5.2% on Tuesday, according to Bloomberg.

Goldman's equity division earned $6.44 billion—almost double the $3.47 billion from fixed income. According to Forbes, the fixed income figure decreased by 1% year-over-year. The division combining both departments grew by 32% to $13.46 billion.

Herman Chan, senior U.S. banks analyst at Bloomberg Intelligence, described the sector gap as follows:

JPMorgan's equity department brought in $5.0 billion (+49%), while fixed income fell by 4% to $5.4 billion, Quartz reported. According to Bloomberg, this is the first decline in bond department revenue in more than two years. Chan attributes this to expectations of a prolonged period of high rates, which kept clients on the sidelines in September. JPMorgan's overall revenue and net income also fell short of analysts' expectations, noted Forbes.

John Williams, President of the Federal Reserve Bank of New York, stated on Tuesday that another rate hike this year seems appropriate. He does not expect another in 2027, Bloomberg reported. According to the latest minutes, most Fed officials supported another hike in 2026. J.P. Morgan also anticipates a hike in December.

High rates remain beneficial for lenders: JPMorgan's net interest income—the difference between loan income and deposit expenses—increased by 12.8% to $27.04 billion, according to Forbes. Forbes did not observe a broad deterioration in credit quality. However, Wells Fargo set aside $1.03 billion for credit losses compared to $681 million a year earlier.

Trading is a different business, and Chan expects a seasonal decline in trading revenue in the fourth quarter. The growth in trading for both banks this quarter was driven by equities, and this growth now depends on the AI theme: on Tuesday, chipmakers' stocks were under pressure, according to Bloomberg.