STORY: Shares of Goldman Sachs rose more than 5% in early Monday trading, after the Wall Street bank reported a smaller-than-expected drop in profit.
Goldman's second-quarter profit fell 48% as investment banking revenue has declined for the whole industry, with JPMorgan Chase and Morgan Stanley both reporting weak results in that division last week.
But Goldman's fixed-income traders helped the bank offset the hit to investment banking by blowing past analysts' expectations for revenue generated by the bank's trading desks, which jumped 32%.
CEO David Solomon said he saw inflation as "deeply entrenched in the economy" and said he wasn't sure whether the situation would improve later this year.
Runaway inflation and rising borrowing costs set by the Federal Reserve to stamp it out have rattled global financial markets, forcing companies to curb their appetite for deals and go slow in raising cash through stock or debt offerings.
Solomon has been working to reduce the Goldman's reliance on volatile trading and investment banking by shifting focus to Marcus, its consumer banking unit.
For the quarter, consumer and wealth management recorded a 25% jump in net revenues, driven by higher fees and credit card balances.