Investors entered 2025 expecting a boom in mergers and acquisitions under a second Trump administration. Goldman Sachs doesn’t think that’s going to happen now, because of tariffs. The bank lowered its outlook for completed mergers and acquisitions volume to a 7% increase. Previously, Goldman expected M & A activity to explode by 25% compared with 2024. “We model completed M & A activity as a function of U.S. economic growth, CEO confidence, and changes in financial conditions,” David Kostin, the bank’s chief U.S. equity strategist, said in a note. “A tariff risk scenario where economic growth is slower and confidence is lower than we currently expect could lead to a contraction in completed M & A activity.” No gold rush has happened yet, the Wall Street investment bank noted. “Announced M & A activity is up 15% year/year, reflecting a healthy pace of growth but not the surge that we and many market participants expected post-election. There have been 152 announced U.S. M & A transactions greater than $100 million in size YTD, in line with the 15-year average,” Kostin added. President Donald Trump has imposed tariffs on imports from Mexico, China and Canada, all of which have retaliated with levies of their own. He has also gone after the European Union, threatening to place duties on Champagne and other European spirits. Kostin also warned that the current macroeconomic environment points to weakness in the IPO market. Already, the rising trade tensions have sparked a sell-off in U.S. equities. The Dow Jones Industrial Average fell 3.1% last week, its biggest weekly decline since 2023. The S & P 500 and Nasdaq Composite lost more than 2% each. “The recent performance of stocks sensitive to capital markets activity suggests that post-election optimism around a broad-based surge in activity has diminished,” Kostin said. Elsewhere Monday morning on Wall Street, MoffettNathanson upgraded Netflix to buy from neutral. “When looking at revenue per hour viewed, Netflix still appears to be underearning relative to the engagement it drives, and we believe it still has a consumer surplus to price into going forward,” analyst Robert Fishman said in a note. “Continued growth in subscription revenues and faster growth in advertising should drive margin expansion of at least +200 bps per year going forward, reaching 40% by 2030 with room to grow from there.”
On second thought, Trump won’t lead to a capital markets boom, Goldman says
