Wall Street banks and brokerages earned $45.9 billion in the first half of 2026, a 51% increase from a year earlier. At this pace, profits could top $90 billion for the year and beat every previous record, including the inflation-adjusted high set in 2009, according to a New York State Comptroller report.
Most people aren't celebrating the windfall. It comes as consumer sentiment remains low, with worries about the cost of living, rising energy prices and persistent food inflation, the report says.
Who Is Winning, and Who Isn't
The gains at the top are hard to miss. Average annual pay, bonuses included, in New York City's securities industry climbed 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 year before.
On Monday, the 10-year Treasury yield hit 5.35%, its highest level since 2002. That figure matters well beyond trading desks. Higher bond yields have raised borrowing costs for mortgages and auto loans, and could weigh on economic activity more broadly.
State Comptroller Thomas P. DiNapoli wrote the report and struck a cautious note. The industry has stayed resilient "despite geopolitical tensions and economic uncertainty," he said. But the recent rise in yields "may dampen profitability" if dealmaking slows or firms' interest liabilities climb significantly. He called rising government bond yields "another concerning indicator for investors."
Trading in stocks, bonds and currencies helped fuel the profits, along with advisory fees, initial public offerings and a surge in mergers and acquisitions. "Investment in AI companies continues to drive the market," DiNapoli wrote. AI-related venture capital spending reached $407 billion in the first half of 2026, more than 50% above the $264 billion total for all of 2025. Underwriting revenues rose 68% year over year. Anthropic, described as a powerhouse AI company that could be valued at $2 trillion, is expected to go public this year and could generate more fees for banks.
DiNapoli said Wall Street has also benefited from a business-friendly administration in the White House. He flagged the administration's deregulatory push among the risks, along with bond-market volatility, geopolitical conflicts, inflation, interest rates and the sector's heavy dependence on AI. "The potential for an industry downturn presents an increasing risk to public finances and the broader regional economy," he wrote. The industry's contribution to New York City tax collections rose 15.8% in fiscal 2026, showing how much public budgets now lean on its fortunes.
A Widening Trade Gap
The trade picture offers little reassurance. In August, the U.S. trade deficit rose 13.7% from the previous month to $105.6 billion, a 17-month high. Imports climbed 4.3% to a record $420.8 billion, while exports rose just 1.4% to $315.2 billion. Higher imports of petroleum, gold and chips used for artificial intelligence drove the gap. Companies bought more expensive computer chips, mostly made in Asia, to build data centers.
The Trump administration sees the deficit as a sign of a weak manufacturing sector. It has imposed tariffs on products including toys, steel, drones and auto parts. Yet the deficit has kept trending upward in recent months. Many economists question whether tariffs can shrink it at all; broader forces such as economic growth and government debt often drive it, they argue.
Policy has been unsteady. The monthly deficit has swung as officials introduced, removed and replaced tariffs. In February, the Supreme Court struck down most of the global tariffs. The administration then turned to other legal authorities to replace some of them. In July, it imposed a new round on more than 80 countries and planned another that could reach more than 40.
Strong Numbers, Weak Confidence
On paper, the broader economy looks solid. Second-quarter GDP was revised up to a 2.2% annualized rate from 1.5%, and the jobless rate stood at 4.2%, consistent with full employment. Still, opinion surveys show widespread dissatisfaction with President Trump's economic performance. Explanations cited include concerns that his policies worsened inflation and interest rates, federal debt topping $40 trillion, worsening climate conditions, and a prospectus for this year's most-anticipated IPO warning of "catastrophic or existential risks to humanity."
Why This Matters:
Two economies run side by side in these figures. One posts record profits, six-figure bonuses and fast-rising tax receipts. The other pays more for food, energy, mortgages and car loans. When a single sector so closely tied to AI enthusiasm supplies this much of a city's tax revenue, a downturn doesn't stay on Wall Street. DiNapoli's warning that one could threaten public finances points to the stakes for services residents rely on. His caution about deregulation, alongside 5.35% Treasury yields and a record trade gap, raises a basic question about oversight: who absorbs the losses if the boom turns? Strong GDP and 4.2% unemployment haven't translated into public confidence, a gap policymakers can't ignore.