Goldman beat estimates but warned the Iran war could cut into deals.

Strong quarter, softening outlook

Goldman Sachs posted first-quarter results that topped Wall Street forecasts on both revenue and earnings per share. The numbers looked solid on the surface — yet management spent the earnings call talking about geopolitical risk, not celebration.

Look, investors noticed right away.

Chief Executive David Solomon told analysts that IPO activity slowed in late March as the conflict in the Middle East intensified. "There is no question that with the conflict in the Middle East, IPO activity slowed a little bit, particularly in March," Solomon said during Goldman's conference call. He added that equity markets have so far shown resilience and that a recovery in listings is possible if that resiliency holds.

But Solomon warned the pause might not be brief. He said corporate leaders are watching commodity-price moves and broader economic effects closely as they make decisions about deal timing and hiring plans.

Energy shock is already showing up

The war's most immediate market impact is on oil and gasoline. With crude jumping sharply after the attacks and shipping risks around the Strait of Hormuz, oil prices surged to multiyear highs, and U.S. Pump prices spiked.

Higher fuel bills show up fast in household budgets and company margins — shoppers cut back and transport-heavy businesses see costs tick up.

Consumer-price data for March captured that pain. The Consumer Price Index rose 3.3% year over year in March, up from 2.4% in the previous months, driven by a 10.9% monthly jump in energy prices and a record 21.2% month-to-month increase in gas prices. Average hourly earnings ticked up 0.2% month over month, meaning real wages fell once inflation is taken into account.

Alexandra Wilson-Elizondo, global co-chief investment officer of multi-asset solutions at Goldman Sachs Asset Management, said the number was a "slight relief" given expectations for an even hotter print, but she warned the CPI may only partially reflect the full force of the conflict because energy moves can continue to ripple through the economy.

Markets are on edge

Stocks swung this week after investors started betting the fighting could drag on and push oil higher for longer. The S&P 500 ended a recent week in the red, erasing much of 2026's gains, while the Dow and Nasdaq also posted losses amid worries that further oil rallies could strain recovery momentum.

That's not all. Redemption freezes at some large private credit funds and softer-than-expected labor-market data have added to investor unease. Economists and strategists are watching a string of data — from consumer inflation to labor-market surveys — for clues about how long the shock will last and how fast it will bleed into company results.

Daan Struyven, head of oil research at Goldman Sachs, has warned the effects of the energy shock are nonlinear: for every day the disruption continues, the economic and market toll gets steeper.

Deal pipeline and underwriting risk

Goldman and other banks make big money from underwriting large IPOs and M&A activity. The industry was banking on a year of blockbuster deals, including highly anticipated offerings in technology and artificial intelligence. Slowing IPO activity threatens fees and revenue for underwriters if those transactions are delayed or downsized.

Solomon said he still expects companies to largely stick to their plans, but he framed that expectation as conditional on market resilience. "And if that resilience continues, I do think you'll see IPO activity accelerate again," he told investors.

Underwriting tends to slow in choppy markets and then rebounds when volatility eases; banks have historically regained deal flow after such sell-offs. The wild card here is how long oil and shipping disruptions keep pressure on corporate confidence and consumer demand.

Broader economic implications

Energy spikes feed straight into headline CPI numbers — we already saw that in March's jump driven by gas and crude. Core CPI — which strips out food and energy — remained more muted in March, climbing 2.6% year over year, which suggests the pass-through to core goods and services had not yet fully materialized. That gives policymakers a narrow window to judge whether the spike is transient or more persistent.

Stephen Juneau, senior economist at BofA Global Research, said prior to the CPI release that it might be too soon to see a material pass-through to core inflation. His view was echoed by other economists who warned that the first wave of inflation from an energy shock often shows up in headline readings before filtering into wages and services.

The Fed must balance whether to keep rates steady if energy-driven inflation proves temporary or stay restrictive if higher prices spread into wages and services. If inflation accelerates further because of sustained oil gains, the central bank could feel pressure to hold rates higher for longer. If inflation cools as energy prices retreat, the Fed would have more room to ease. Either way, bank earnings and dealmaking depend on what happens to growth and borrowing costs.

What companies are doing

Executives are pausing some decisions. Solomon said CEOs are "looking carefully" at the situation — weighing commodity-price swings and potential supply-chain snarls. That caution affects not just IPO calendars but hiring and capital-expenditure plans.

Retailers and consumer-facing firms feel the squeeze when fuel and transport costs rise, because higher prices leave households with less discretionary spending. Some companies may slow hiring or delay investments until they see whether the energy shock eases.

Trading and market-making income can cushion banks when deal fees fall; Goldman said some trading businesses helped the quarter's results. Goldman reported strength in some of those businesses in the quarter, helping the firm beat estimates even as deal pipelines softened.

Looking ahead

Markets will get more signals in the weeks ahead: monthly price indexes, job-flow surveys, and corporate earnings will all matter. The CPI and other price gauges already show the early inflation cost of the Iran war. How long those costs last is the big question.

Goldman's leadership is signaling caution but not panic. They're watching energy prices, deal calendars, and corporate sentiment — and they're telling investors they'll act if conditions change.

Thing is — the knock-on effects won't be the same for every sector. Energy producers may see a revenue boost. Airlines and transporters face immediate margin pressure. Underwriters risk lost fees if headline deals don't launch on schedule.

For now, Goldman reported strong quarterly results and warned that a prolonged conflict "probably will be a headwind" for some areas of business if it drags on, according to remarks made during the earnings call.

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"The market was braced for a hot print, so today's inline number is a slight relief," said Alexandra Wilson-Elizondo, global co-chief investment officer at Goldman Sachs Asset Management.