Wall Street trading desks posted about three times the gains of their European counterparts in the first quarter, driven by bond and commodity volatility. JPMorgan saw fixed-income revenue rise 21% to $7.1bn, Morgan Stanley's bond business jumped 29% and Citigroup's trading revenue climbed 13% to $5.2bn. By contrast, Goldman Sachs' fixed-income division fell 10%, missing analysts by $910m as some European banks logged sharp declines. The gap reflects how energy-driven market swings and rate moves translated into oversized returns for US traders while many European houses missed that windfall.

US trading surge: numbers and drivers

Wall Street banks reported a strong start to 2026. JPMorgan's fixed-income trading revenue rose 21% to $7.1bn. Morgan Stanley's bond business grew 29%. Citigroup's fixed-income take climbed 13% to $5.2bn. Those are big moves in a single quarter. They helped lift overall trading profits at the largest US firms.

Traders say two forces powered the gains. One was swings in interest-rate positioning. Markets began the year pricing in multiple Federal Reserve cuts. Positions tied to rates moved sharply when expectations shifted. The other was oil and commodity volatility linked to the conflict in Iran. Bigger moves in energy prices pushed trading desks to trade more, and to profit from large, rapid swings.

Bloomberg reported that, taken together, Wall Street desks posted roughly three times the trading gains of their European peers in the period. That contrast boiled down to who was positioned for the moves and who was not.

Where Europe lagged

European investment banks failed to capture the same windfall. Several large continental lenders reported weaker fixed-income and commodity trading results. Societe Generale's fixed-income trading revenue fell 18% year on year. BNP Paribas and Credit Agricole also returned results that disappointed investors.

Barclays' traders struggled to match US counterparts.

The gap was not uniform across Europe. Deutsche Bank posted a record quarterly post-tax profit of €2.2bn. Its private bank pre-tax profits rose 39% and assets under management reached €1.8tr, supported by €22bn in net inflows across its private and asset management units. UBS also reported positive results for the period. Still, the broader pattern showed that many European trading desks missed the same commodity-driven upside that helped US houses.

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Goldman's stumble and the internal response

Goldman Sachs stood out among US peers for the wrong reason. Fixed-income revenue at the firm dropped 10% in the first quarter, leaving the desk about $910m below analysts' expectations. That shortfall contrasted sharply with the blockbusters at JPMorgan, Morgan Stanley and Citigroup.

Goldman's fixed-income, currencies and commodities business, or FICC, produced about $4bn in revenue in the quarter, according to reporting. Executives offered explanations in public remarks. Denis Coleman, chief financial officer at Goldman Sachs, told analysts the weak showing was "basically just a function of the overall environment making markets." He said the firm remained engaged with clients but that performance in rates and mortgages had been lower.

Goldman president John Waldron addressed the results at a Semafor event. He framed the quarter as a moment when volatility can go against you. He said: "In the period of time when you have a lot of volatility around rates in particular and commodities, you can get in traffic where things don't go your way at any given moment in time." He added that, viewed over a longer span, he had no concerns about the FICC business.

Those comments haven't eased outside scrutiny. Mike Mayo, a veteran analyst at Wells Fargo, described Goldman's performance as "worst-in-class" and said: "I'd imagine that at Goldman, a fire is being lit under the traders, managers and risk overseers in FICC after such an underperformance." Mayo's remark pointed to pressure inside Goldman to address missed opportunities after a long history of outperformance in turbulent markets.

How positioning mattered

The accounts point to positioning as the common thread. Many firms entered the year betting on Fed rate cuts and on commodity moves in a certain direction. When markets surprised, those bets paid off for some and hurt others. Traders who were long volatility or who had structured swaps and options to profit from oil moves saw gains. Firms on the wrong side of rate trades took losses or saw lower marks.

That dynamic is visible in the numbers. JPMorgan, Morgan Stanley and Citigroup posted large quarter-on-quarter trading gains. Goldman fell short. Several major European banks also lagged, even as a few continental names recorded healthy profit growth in other divisions.

The conflict in Iran tightened energy markets in the quarter. Rising oil prices fed inflation worries and complicated the outlook for central banks. Traders moved quickly to price in risks. That created volatility, which in turn widened trading opportunities in fixed income and commodities.

US firms capitalised. European banks, often more exposed to different client flows and regulatory constraints, didn't capture the same level of trading profits from those swings. The result was a stark transatlantic divergence in first-quarter trading results.

Outperformance in a single quarter often comes down to mix and market access. Firms with bigger wholesale trading footprints and deeper derivative desks tend to scale volatility into profit more easily. Firms that rely more on client flow in a narrower set of products can miss the upside when markets change fast.

In this cycle, energy and rate moves opened large, short-term windows. US desks were generally positioned to exploit them. Some European desks were not. That left a visible gap in reported trading revenues.

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Mike Mayo, a Wells Fargo analyst, said: "I'd imagine that at Goldman, a fire is being lit under the traders, managers and risk overseers in FICC after such an underperformance."

This article was created with AI assistance.