Wall Street earned $45.9 billion in profits in the first half of 2026, up 51% from a year earlier. The New York State Comptroller says the industry could top $90 billion for the full year. That would beat every previous record, including the inflation-adjusted high set in 2009.
Private enterprise is driving the money, not a government program. Spending on artificial intelligence, brisk trading and a revival in dealmaking lifted the securities industry, according to the comptroller's latest report on New York City's securities industry.
The Profit Engine
The numbers make forecasters look timid. In May, the New York City comptroller's office projected Wall Street would earn $45.3 billion for all of 2026. The industry passed that figure before the year was half over.
Trading in stocks, bonds and currencies helped. Fees for advising on client investments, underwriting initial public offerings and a pickup in mergers and acquisitions helped, too. Underwriting revenues, including IPO fees, jumped 68% year over year in the first half. "Investment in AI companies continues to drive the market," State Comptroller Thomas P. DiNapoli wrote. AI-related venture capital spending hit $407 billion in the first half of 2026, more than 50% above the $264 billion total for all of 2025.
Anthropic, described as a powerhouse AI company that could be valued at $2 trillion, is expected to go public this year. A public offering could generate underwriting and trading fees for the big banks.
DiNapoli also acknowledged a factor worth noting: Wall Street has benefited from a business-friendly administration in the White House.
The Public Ledger
The payoff reaches far beyond trading floors. Average annual pay, including bonuses, in New York City's securities industry rose 11.1% to $561,770 in 2025. The bonus pool reached $49.2 billion, or an average of $246,900 per employee, up 6% from the prior year.
The industry’s tax contribution climbed, too. New York City's tax collections from the securities industry rose 15.8% in fiscal 2026. "Commensurate with record industry profitability, tax collections related to securities continue to reach new levels," DiNapoli wrote.
That dependence cuts both ways. DiNapoli warned that "the potential for an industry downturn presents an increasing risk to public finances and the broader regional economy." When a city and region lean this hard on one sector's windfall, a bad year can hit the budget fast.
Yields Climb, Confidence Doesn't
The 10-year Treasury yield reached 5.35% on Monday, its highest level since 2002. It influences borrowing rates across the economy, with effects already showing up in mortgages and auto loans. DiNapoli said the rise "may dampen profitability" if dealmaking slows or firms' interest liabilities grow significantly. "Rising yields for bonds issued by the U.S. and other governments in recent weeks are another concerning indicator for investors," he wrote.
The report also flagged bond-market volatility, geopolitical conflicts, inflation, interest rates, the outsized role of the AI sector and the administration's deregulatory push as risks.
Consumers aren't celebrating. Sentiment is low, driven by worries about the cost of living, rising energy prices and persistent food inflation. Federal debt now tops $40 trillion, one explanation cited for widespread dissatisfaction with the economy in opinion surveys.
Trade Deficit Widens Despite Tariffs
The U.S. trade deficit rose 13.7% in August from the previous month to $105.6 billion, a 17-month high. Imports increased 4.3% to a record $420.8 billion, while exports rose 1.4% to $315.2 billion. Imports of petroleum, gold and chips used for artificial intelligence drove the gap.
The Trump administration has pursued tariffs on toys, steel, drones and auto parts to shrink the deficit, which President Trump views as a sign of a weak manufacturing sector. The deficit has kept trending upward, partly because companies are importing pricier computer chips, mostly made in Asia, to build data centers.
Many economists doubt tariffs can do the job. They argue broader forces, such as economic growth and government debt, often drive the deficit.
The tariff regime hasn't been stable. The Supreme Court struck down most of the global tariffs in February. The administration replaced some using other legal authorities, imposed a new round on more than 80 countries in July, and planned another that could reach more than 40 countries.
Growth Holds Up
The underlying economy is sturdier than the mood suggests. Second-quarter GDP was revised up to a 2.2% annualized rate from 1.5%, and the jobless rate was 4.2%, a level consistent with full employment.
Why This Matters:
Record profits show private capital, not federal programs, is powering growth. But the same report that celebrates the boom warns that public finances in New York now ride on a sector concentrated in AI enthusiasm. A 5.35% ten-year yield raises the price of mortgages, auto loans and deals alike. The tariff story shows how legal and policy whiplash—levies struck down, replaced and expanded—makes planning harder for businesses, while the deficit keeps widening anyway. Full employment and rising GDP give policymakers room, but they also raise a question: how long can tax revenue depend on one hot industry?