By Saeed Azhar and Niket Nishant

(Reuters) -Goldman Sachs surpassed first-quarter profit estimates, fueled by stock traders who capitalized on volatile markets to bring in record equities revenue, but the bank's CEO warned of a difficult environment ahead.

The Wall Street bank joined rivals JPMorgan Chase and Morgan Stanley in reporting higher profits, but investors are more focused on future projections as tariffs increase inflation and recession risks.

"While we are entering the second quarter with a markedly different operating environment than earlier this year, we remain confident in our ability to continue to support our clients," said CEO David Solomon, who noted the "great uncertainty" that hung over markets in the first quarter.

Goldman's profit rose 15% to $4.74 billion, or $14.12 per share, for the three months ended March 31, the bank said on Monday.

The average analyst estimate for earnings was $12.35 per share, according to data compiled by LSEG. The bank's shares rose 1% to $499.26.

Turbulent markets lifted Goldman's equities trading revenue by 27% to a record $4.2 billion as investors scrambled to remake their portfolios to mitigate the hit from the new tariffs.

Fixed income, currency and commodities trading revenue rose 2% to $4.4 billion.

However, investment banking fees fell 8% to $1.9 billion in the quarter due to lower advisory fees.

Initial public offerings are yet to recover meaningfully. The benchmark S&P 500 index has dropped around 9% so far this year and mergers and acquisitions remain subdued.

"I don't think investment banking is dead. It's just going to be slower, and certainly it's not going to be as robust," said Chris Marinac, director of research at Janney Montgomery Scott.

The shift underscores a dramatic change in sentiment for a sector that, until just a few months ago, had been celebrating U.S. President Donald Trump's return to the White House.

Solomon outlined how the U.S. has benefited from trade and the dollar's role as the reserve currency.

"The administration's focus on trade barriers and strengthening the U.S. competitive position is commendable," he said, adding that it was also important to note that few "have benefited more from the post World War Two economic and financial order than the United States."

Goldman's shares have fallen 12% since the tariffs were unveiled earlier this month, while rival JPMorgan and Morgan Stanley are 4% and 9% lower, respectively.

But concerns had emerged even before the latest slide. Brokerage Oppenheimer downgraded Goldman's shares in March, warning that the Trump administration's aggressive efforts to upend global trade norms could hit a slew of firms reliant on capital markets activity.