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Goldman Sachs Reports Second-Highest Quarterly Profit in History — But Fixed-Income Revenue Misses, Stock Falls 1.9%, and Earnings Season Opens on Uncertain Ground
Today’s US and Canada intelligence brief leads with the earnings result that sets the tone for the most consequential reporting season since the war began. Goldman Sachs reported its second-highest quarterly profit ever, powered by a record haul in equities trading. But the result that moved markets was the miss: fixed-income, currencies, and commodities (FICC) revenue fell short of expectations, sending the stock down 1.9% despite the headline beat. The divergence — equities soaring while FICC disappoints — captures the split personality of Wall Street during the war: equity markets have rallied to all-time highs on ceasefire optimism, while the physical commodity and currency markets that FICC desks trade remain too volatile and unpredictable to monetise reliably.
The Goldman result is the opening statement of an earnings season that Yahoo Finance describes as “tricky” for Wall Street’s biggest banks. The bank’s CEO navigated the call without forward guidance that acknowledged the ceasefire could collapse within 48 hours — a diplomatic omission that every subsequent reporting CEO must also manage. The practical question for every company reporting this week: how do you guide forward when the ceasefire expires Tuesday, the US is seizing ships in the Gulf of Oman, and oil prices swing 10% in a single day? Goldman’s answer was to let the record equity profit carry the headline and bury the FICC miss in the detail. That strategy worked for one day. Whether it works for the season depends on whether Tuesday delivers extension or escalation.
For Latin American investors, Goldman’s earnings reveal the specific financial market conditions that shape Latin American capital flows. The record equity profit means Goldman’s equity desks are actively deploying capital — including into Latin American markets that have lagged the US recovery and offer catch-up potential. The FICC miss means Goldman’s commodity and currency desks are finding the war’s volatility harder to trade profitably — which reduces the bank’s appetite for emerging market currency risk and commodity positions that Latin American trading counterparts depend on. As our previous US and Canada intelligence brief tracked, the S&P hit all-time highs. Goldman’s earnings confirm that the rally is real but uneven: equity is king, FICC is struggling, and every subsequent bank’s results will either confirm or contradict the pattern.
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US Extends Russian Oil Sanctions Waiver to Ease Iran War Shortages — Days After Treasury Secretary Bessent Publicly Ruled It Out
The United States has extended its waiver on Russian oil sanctions, just days after Treasury Secretary Bessent ruled out such an extension and declared the “financial equivalent of bombing Iran” through secondary sanctions on Chinese, Emirati, and Omani banks. The reversal — reported by Fortune — is the most significant policy contradiction of the crisis: the administration is simultaneously threatening to sanction banks that do business with Iran while extending the waivers that allow Russian oil to flow into global markets. The reason is arithmetic: the Hormuz closure removed approximately 20% of global seaborne crude supply, and the US cannot enforce a naval blockade on Iran while simultaneously enforcing sanctions that remove Russian supply. One constraint must yield. Russia’s oil won.
The waiver extension directly affects this US and Canada intelligence brief’s previous reporting on India’s crude sourcing crisis. Our Thursday brief documented that the US had ended waivers for Russian AND Iranian oil, forcing India to recalibrate its entire sourcing strategy. The extension partially reverses that pressure — Indian refiners can continue purchasing Russian crude without immediate secondary sanctions risk, though the legal uncertainty remains elevated. The policy whipsaw — Bessent ruling it out, the administration extending it days later — destroys the predictability that trade compliance departments require. Every Indian, Chinese, and Southeast Asian refiner that made sourcing decisions based on Bessent’s statement now faces a different policy reality.
For Latin American investors, the Russian oil waiver extension modifies the demand-side thesis our previous brief established. If Russian crude continues flowing to Asian buyers with US permission, the redirected demand for Latin American crude (Brazilian pre-salt, Guyanese Stabroek, Colombian Castilla) is smaller than the 700,000-1,000,000 barrels per day we projected. But the waiver is temporary and the policy is unstable — Bessent publicly opposed it, the administration extended it anyway, and the next reversal could come at any point. Latin American crude producers benefit from the structural uncertainty itself: buyers who cannot rely on consistent Russian supply pay a reliability premium for supply from jurisdictions (Brazil, Guyana, Colombia) where the sanctions risk is zero. The waiver extension reduces the volume opportunity but does not eliminate the premium opportunity.
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S&P 500 Had Wiped Out All 2026 Losses — Rose to Highest Since Late February — Now Pulling Back as Ship Seizure Tests Whether the Rally Can Survive a Setback
Last week the S&P 500 completed a recovery that seemed impossible seven weeks ago: the index rose to its highest level since late February, wiping out every point lost since the Iran war began on February 28. Bloomberg reported the S&P gained 1% in a single session when Trump said Iran “still wanted to make a deal,” reaching all-time record territory at 7,022. Monday’s session tells a different story: the Dow lost 53 points (-0.1%), the S&P shed 0.3%, and the Nasdaq pulled back 0.6% after the weekend’s ship seizure and Hormuz reversal. But the losses were remarkably contained given the escalation — prompting Aptus Capital’s David Wagner to declare that “the war with Iran is now in the rearview mirror for the market.”
Wagner’s assessment deserves interrogation rather than acceptance. The market has been conditioned by the “TACO trade” — “Trump Always Chickens Out” — a pattern established during the tariff crisis when Trump reversed his most aggressive positions after markets declined. Investors are applying the same framework to the Iran war: Trump escalates, markets sell, Trump de-escalates, markets rally. The pattern has worked three times in seven weeks. But the ship seizure represents something the tariff reversals did not: kinetic military action within a ceasefire framework. Trump did not reverse the tariffs by firing on Chinese cargo ships. He reversed them with a social media post. The Iran escalation involves the USS Spruance firing rounds into an engine room. The de-escalation mechanism that the TACO trade assumes requires both sides to step back. Iran’s Qalibaf has stated that passage is “impossible” while Iran’s own ports are blockaded. The TACO framework may not apply when the other party refuses to chicken out.
For Latin American investors, the S&P’s whipsaw — from near-correction to all-time highs and now pulling back — creates the volatility environment that Latin American portfolio managers must navigate. Brazilian, Mexican, and Colombian equity markets correlate with the S&P but with higher beta: when the S&P moves 1%, Bovespa often moves 1.5-2%. The S&P’s -0.3% Monday translates to larger moves in São Paulo and Mexico City. The question for Tuesday: if the ceasefire expires without extension, does the S&P return to correction territory — and if so, does the Latin American sell-off that follows create buying opportunities for investors who believe the structural fundamentals (AI demand, Latin American commodity positioning, post-crisis recovery) are intact? Monday’s contained losses suggest the market believes in extension. Tuesday determines whether that belief is vindicated.
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Earnings Week Ahead: Banks Continue, Industrials Report, Every CEO Navigating the Ceasefire Expiry — “Tricky Season” Where Forward Guidance Is the Minefield
Goldman’s mixed result opens a week where Wall Street’s ability to price corporate America will be tested by an event no earnings model can forecast: the ceasefire expiry on Tuesday. Yahoo Finance characterised the season as “tricky” for CEOs who must manage war uncertainty in their forward guidance. Goldman navigated by letting record equity profit dominate the narrative. Netflix disappointed on Thursday, suggesting the consumer affordability squeeze is reaching entertainment spending. The pattern for the week: backwards-looking results may be strong (Q1 captured the war’s early weeks but also the pre-war momentum); forward guidance is where the risk concentrates.
The airline sector provides the most acute example. Delta CEO Bastian disclosed an additional $2.5 billion in fuel costs for the quarter and warned that any “flying on the margin” would be “reconsidered.” The IEA warned that Europe has “maybe six weeks” of jet fuel supplies remaining. KLM is cutting 80 return flights from Schiphol. United, Lufthansa, and Cathay Pacific have all pruned schedules. Global airline capacity for May has been reduced by approximately 3 percentage points, with 19 of the 20 largest carriers slashing flights. Monday’s trading confirmed the impact: Delta, United, Southwest, and American Airlines all fell more than 2%. The aviation sector is the earnings canary — the industry most directly exposed to the war’s cost structure and the one where forward guidance cannot hide behind optimistic assumptions about Hormuz reopening.
For Latin American investors, the US earnings season shapes capital allocation decisions that flow directly into Latin American markets. Strong US earnings — like Goldman’s equity record — support the global risk appetite that drives capital into emerging markets. Weak forward guidance — like Delta’s $2.5 billion fuel warning and Netflix’s miss — signals that the war’s costs are passing through to corporate America and constraining the profit outlook that stock prices depend on. Latin American airlines (LATAM Airlines Group, Avianca, Gol, Copa) face identical jet fuel pressures to their US counterparts — but with thinner margins and less hedging capacity. If the IEA’s “six weeks of European jet fuel” warning materialises into actual supply constraints, Latin American carriers sourcing fuel from European-connected supply chains (transatlantic routes, European hub connections) face the same capacity reductions that KLM and Lufthansa have already announced. The earnings season is the data feed. Tuesday’s ceasefire expiry is the variable that every data point depends on.
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