Goldman Sachs could come under pressure as tariff uncertainty hangs over capital markets activity, according to Morgan Stanley. Analyst Betsy Graseck downgraded the bank to equal weight rating from overweight. She also lowered her price target to $558 from $659. To be sure, the new target still implies 19% upside. “GS is the most exposed Large Cap Bank to investment banking revenues, which we view as having the fastest twitch response within the Financials sector to recession risk and deteriorating market conditions, much faster than loan growth at traditional commercial banks,” she wrote. “Over 60% of GS revenues come from Global Banking & Markets.” GS 1Y mountain GS 1Y chart Concern of a recession has increased recently as President Donald Trump moves forward with steep tariffs on imports from other countries. This has dampened the U.S. economic outlook. Earlier in the year, investors and analysts hoped a second Trump administration would spark a wave of dealmaking. If the economy slows down, that’s unlikely. On top of that, “rising recession risk could make Goldman’s Apple Card portfolio worth less, given 36% of GS credit card book have less than 660 FICO score,” Graseck added. Goldman shares lost more than 3% in the premarket following the downgrade. The stock has also fallen more than 17% year to date. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!