Goldman Sachs failed to defy markets today after revealing that net profits plunged more than 80% from the previous quarter as a $4bn (€3.1bn) hole in trading revenues hit results, increasing the painful trend in Wall Street earnings that many expected the bank to buck.

Even stripping out the effects of the UK bank payroll tax and the $550m settlement with the Securities and Exchange Commission, profits would have been less than half where they were in the first quarter. Including the two charges, profits were $453m for the second quarter, 86% down on the $3.3bn in the first quarter and almost as far below the second-quarter level a year ago.