Goldman Sachs (GS, Financial) CEO David Solomon believes M&A and IPO activity will eventually stabilize, even as uncertainty keeps investors and corporate executives on edge. In an interview at an investment conference in Oslo, Solomon noted that while policy volatility has slowed down capital activity, the need to transact, raise capital, and secure liquidity remains intact. Solomon emphasized that markets are undergoing a healthy reset of expectations, rather than entering a structural downturn. Despite a softer deal environment, Goldman's trading division has capitalized on the chaos, with stock traders delivering a record-breaking first quarter — a pattern seen across Wall Street.

Solomon cautioned that without greater policy clarity, companies could continue tightening investments and cutting costs. Conversations with CEOs suggest an increasing focus on expense control, with layoffs likely to rise as 2024 progresses. Meanwhile, trading businesses are thriving in the volatile environment, helping offset softness elsewhere. Solomon remains optimistic that regulatory pressures in the US will ease over time, helping restore a more predictable operating backdrop for financial markets.

Looking abroad, Solomon sees potential in Europe's recent fiscal moves. He pointed to Germany's stimulus efforts and positive signals out of Brussels regarding a rollback of restrictive financial regulations. Solomon believes further fiscal action combined with regulatory reforms could spark stronger growth across Europe's capital markets — presenting a potential tailwind for investors willing to navigate short-term uncertainty for longer-term opportunities.