Goldman Sachs Bear Market: When Earnings Miracles Stop Happening

Goldman Sachs shares have crashed into bear market territory, down 22% from their July peak of $1,153.99 to close Friday at $902. The fall is as mechanically straightforward as market casualties get: the M&A boom that was supposed to carry the bank through 2024 and beyond has evaporated. Global M&A activity clocked in at $993 billion in the third quarter, a 41% collapse from the second quarter. When your primary revenue driver stops showing up to work, the stock price follows.

Here is where the earnings paradox becomes almost darkly comic. In the second quarter, Goldman Sachs crushed expectations so thoroughly that you might have expected institutional investors to tattoo the results on their forearms. Revenue came in at $20.34 billion against a $16.22 billion estimate. Earnings per share of $20.98 demolished the $14.47 consensus. Net earnings hit $6.63 billion. The firm raised its dividend 25% to $5.00 per share and bought back $4.0 billion in stock. This was not a weak quarter masquerading as respectable. This was a bank firing on all cylinders.

Yet down 22% the stock went anyway. Down it has stayed.

This is the texture of modern equity markets: spectacular numbers, generous capital returns, and a stock price that moves with all the enthusiasm of a DMV application. The reason is simple. Traders stopped believing the narrative the moment M&A activity turned south. No amount of backward-looking earnings precision changes a forward-looking miss. Good Q2 results mean nothing if Q3 and beyond look like the desert.

Which brings us to the imminent earnings roulette. Goldman Sachs is scheduled to report Q3 2026 results before the market opens on October 13. Analysts are forecasting $17 billion in revenue and EPS of $13.65, up from $12.25 in the prior year. These are credible estimates. Goldman Sachs probably will not miss them by a mile. The bank still knows how to make money. The problem is different.

Even credible earnings do not resurrect narratives that the market has abandoned. Traders Union analyst Viktoras Karapetjanc captured the dynamic precisely: investors remain on edge with volatility likely to persist until new financials are disclosed. Translation: this is not a buying opportunity masquerading as fear. This is fear that happens to be justified. The stock is nearing the 38.2% Fibonacci retracement level, technical analysts note, with the Relative Strength Index approaching oversold territory. Some forecasts see the stock dropping toward the 50% retracement level near $783.

That language—Fibonacci levels, oversold conditions—is how traders describe stocks they suspect will keep falling. The numbers work. The story broke. Nothing has fixed it yet.

Goldman Sachs' earnings are coming. They may be fine. They may even be good. And the stock may fall anyway, because the equity market has learned what bankers have spent decades avoiding: that a bank's ability to convert current revenue into current profit tells you nothing about whether that bank's primary growth driver—the M&A window—is closing for business. A 22% decline is not panic. It is the market pricing in the possibility that it already knows what the next few quarters hold, regardless of how well the previous quarter performed.

If earnings were the cure, Goldman Sachs would not be down this far despite having just reported its best quarter in recent memory. Earnings are the scoreboard. They do not change the game. The game changed when M&A fell 41% quarter-over-quarter. Everything else is just waiting to see if the market was right.