Wall Street earned $45.9 billion in profits in the first half of 2026, up 51% from a year earlier, as consumer sentiment stayed low over living costs, energy prices and food inflation. The New York State Comptroller’s latest report said profits could top $90 billion for the year at this pace, surpassing previous records and the inflation-adjusted record set in 2009.
Who Gets the Windfall
Trading, dealmaking and spending on artificial intelligence helped boost securities-industry profits. In May, the New York City comptroller’s office forecast that Wall Street would earn $45.3 billion for all of 2026. The industry had already exceeded that projection in the year’s first half.
“Investment in AI companies continues to drive the market,” Thomas P. DiNapoli, New York State Comptroller and author of the report, wrote. AI-related venture capital spending reached $407 billion in the first half of 2026, more than 50% above the full-year total of $264 billion in 2025.
Underwriting revenues, including fees from initial public offerings, rose 68% year over year in the first half of 2026. Anthropic, described as a powerhouse AI company that could be valued at $2 trillion, is expected to go public this year. Wall Street banks could collect fees from underwriting and trading that offering. DiNapoli also said the industry benefited from a business-friendly administration in the White House.
The profits have their own ladder. In New York City’s securities industry, average annual pay, including bonuses, rose 11.1% to $561,770 in 2025. The bonus pool hit $49.2 billion, equal to an average bonus of $246,900 per employee, up 6% from the previous year. The industry’s contribution to New York City tax collections increased 15.8% in fiscal 2026.
“Commensurate with record industry profitability, tax collections related to securities continue to reach new levels,” DiNapoli wrote. The report warned that a downturn could affect public finances and the broader regional economy.
Borrowing Costs, Public Risk
The 10-year Treasury yield reached 5.35% on Monday, its highest level since 2002. That benchmark shapes borrowing rates across the economy; higher bond yields have raised mortgage and auto loan costs and could weigh on economic activity, stock markets, IPOs and dealmaking.
DiNapoli said the recent increase “may dampen profitability” if dealmaking slows or firms’ interest liabilities rise significantly. He called rising yields for bonds issued by the U.S. and other governments “another concerning indicator for investors.” The report listed bond-market volatility, geopolitical conflicts, inflation, interest rates, the AI sector’s large contribution and the administration’s deregulatory push among the risks.
“The potential for an industry downturn presents an increasing risk to public finances and the broader regional economy,” DiNapoli wrote. His description of the industry’s resilience sits alongside a warning: public finances face exposure to the same market fortunes driving record private profits. “Despite geopolitical tensions and economic uncertainty, the industry has remained resilient,” he said.
Tariffs and the Deficit
The U.S. trade deficit rose 13.7% in August from the previous month to $105.6 billion, a 17-month high. Imports climbed 4.3% to a record $420.8 billion, while exports increased 1.4% to $315.2 billion. Higher imports of petroleum, gold and chips used for artificial intelligence helped widen the gap.
President Trump sees the deficit as evidence of a weak manufacturing sector. His administration has imposed tariffs on products including toys, steel, drones and auto parts in an effort to reduce it. The deficit has kept trending upward in recent months, partly because companies import more expensive computer chips, most of which are made in Asia, to build data centers. Many economists question whether tariffs can shrink the deficit, arguing that broader forces such as economic growth and government debt often drive it.
The tariff program has shifted repeatedly. Importers brought in inventory ahead of tariffs after Trump was elected; the deficit hit historic levels in the first few months of his term; then imports and the deficit fell after global tariffs took effect on what Trump called “Liberation Day” last year. The Supreme Court struck down most of those tariffs in February. The administration then used other legal authorities to replace some, imposed a new round on more than 80 countries in July, and planned another round that could apply to more than 40 countries.
Second-quarter U.S. gross domestic product was revised higher to a 2.2% annualized rate from 1.5%, and the jobless rate stood at 4.2%, a level consistent with an economy considered to be at full employment. Those figures appeared alongside widespread dissatisfaction in opinion surveys with President Donald Trump’s economic performance and the broader economy. Explanations included concerns about inflation and interest rates, federal debt topping $40 trillion, worsening climate conditions, and the prospectus for the year’s most-anticipated IPO warning of “catastrophic or existential risks to humanity.”