Wall Street earned $45.9 billion in profits during the first half of 2026, up 51% from a year earlier. Consumers, meanwhile, faced concerns about living costs, rising energy prices and persistent food inflation. The New York State Comptroller’s report said securities-industry profits could top $90 billion for the year at the current pace, surpassing previous records, including the inflation-adjusted record set in 2009.
Who Profits
Trading stocks, bonds and currencies, along with fees for advising on client investments, initial public offerings and mergers and acquisitions, fueled the industry’s earnings. “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 hit $407 billion in the first half of 2026, more than 50% above the full-year total of $264 billion in 2025.
Underwriting revenues, including IPO fees, climbed 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, potentially generating underwriting and trading fees for Wall Street banks. DiNapoli also said Wall Street benefited from a business-friendly administration in the White House.
The gains topped an earlier public forecast. In May, the New York City comptroller’s office projected Wall Street would earn $45.3 billion for all of 2026; first-half profits had already passed that mark.
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, 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 grew 15.8% in fiscal 2026. “Commensurate with record industry profitability, tax collections related to securities continue to reach new levels,” DiNapoli wrote.
Who Pays and Who Bears the Risk
Borrowing costs climbed as the 10-year Treasury yield hit 5.35% on Monday, its highest level since 2002. That yield influences borrowing rates across the economy. Higher bond yields have raised costs for mortgages and auto loans 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.
The comptroller’s report warned that bond-market volatility, geopolitical conflicts, inflation, interest rates, the AI sector’s large contribution and the administration’s deregulatory push pose risks. “The potential for an industry downturn presents an increasing risk to public finances and the broader regional economy,” DiNapoli wrote. The report connects record industry profits with higher tax collections, while warning that a downturn could put public finances and the regional economy at risk.
The U.S. trade deficit jumped 13.7% in August from the previous month, reaching $105.6 billion, a 17-month high. Imports rose 4.3% to a record $420.8 billion, while exports increased 1.4% to $315.2 billion. More imports of petroleum, gold and chips used for artificial intelligence helped widen the gap.
Tariffs and the Limits of the Policy
President Trump sees the trade deficit as a sign of a weak manufacturing sector. His administration has imposed tariffs on products including toys, steel, drones and auto parts to reduce it. The deficit has kept trending upward in recent months, partly because companies import more expensive computer chips, most made in Asia, to build data centers.
Many economists question whether tariffs can shrink the deficit. They argue that broader forces, such as economic growth and government debt, often drive it. The monthly deficit has fluctuated as tariffs were introduced, removed and replaced. After Trump was elected, importers brought in inventory ahead of tariffs, pushing the deficit to historic levels in the first few months of his term. Imports and the deficit fell after he introduced global tariffs on what he 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 of them. In July, it imposed a new round of tariffs on more than 80 countries and planned another round that could apply to more than 40 countries.
Second-quarter U.S. gross domestic product was revised upward to a 2.2% annualized rate from 1.5%, and the jobless rate stood at 4.2%, consistent with an economy considered to be at full employment. Yet opinion surveys showed widespread dissatisfaction with President Donald Trump’s economic performance and the broader economy. Cited explanations included concerns that his policies had worsened inflation and interest rates, federal debt topping $40 trillion, worsening climate conditions, and an IPO prospectus warning of “catastrophic or existential risks to humanity.”