new York
Wall Street started 2026 on a strong note and continued its booming first half.
Profits have surged, fueled by massive spending on artificial intelligence, increased trading activity in a volatile market and deals that benefited from a relaxed regulatory environment under the Trump administration.
Wall Street generated $45.9 billion in profits in the first half, up 51% from the same period last year, according to the New York State Comptroller’s latest report on New York’s securities industry.
At the current rate of growth, industry profits could exceed $90 billion in 2026 for the full year, breaking previous records and surpassing the inflation-adjusted record set in 2009.
The boon for traders and bankers comes as investments in AI fuel U.S. economic growth, even as consumer confidence hovers at historic lows on concerns about the cost of living, from rising energy prices to stubborn grocery inflation.
“Despite geopolitical tensions and economic uncertainty, the industry has remained resilient,” Thomas P. DiNapoli, New York State comptroller and author of the report, said in a statement.
The good times should continue, but risks remain. The financial sector faces a persistent obstacle: rising interest rates.
The key yield on the 10-year Treasury, which sets interest rates across the economy, rose to 5.35% on Monday – its highest level since 2002.
The recent rise in interest rates “could dampen profitability” if transactions slow or companies’ interest liabilities increase significantly, DiNapoli noted.
Rising bond yields drive up the cost of borrowing, from mortgages to auto loans, which can weigh on economic activity. Higher yields can also increase risks to the stock market and dampen the booming market for IPOs and deals.
“The rise in yields on bonds issued by the United States and other governments in recent weeks is another indicator of concern for investors,” DiNapoli wrote in the report.
The New York City comptroller’s office predicted in May that Wall Street would make $45.3 billion in profits for the entire year – a figure that has already been exceeded.
The profit increase was driven by strong stock, bond and currency trading, client investment supervision and advisory fees, underwriting of initial public offerings and a pick-up in mergers and acquisitions.
“Investments in AI companies continue to drive the market,” DiNapoli wrote. AI-related venture capital spending reached $407 billion in the first half of the year, more than 50% higher than the annual total of $264 billion in 2025, according to the report.
The AI boom, resumption of mergers and acquisitions and a series of IPOs have created a favorable environment for profits. Revenue from underwriting activities – such as IPOs – increased 68% year-over-year in the first half of 2026, according to the report. Anthropic, a leading AI company that could be valued at $2 trillion, is expected to go public this year, creating another major opportunity for Wall Street banks to collect fees related to underwriting and trading activities.
Wall Street’s fortunes have also been helped by a business-friendly administration in the White House, DiNapoli said.
Rising corporate bottom lines are reflected in rising wages: Average annual pay (including bonuses) in New York City’s securities industry rose 11.1% to $561,770 in 2025. Last year, the bonus pool reached $49.2 billion, according to the report, equating to an average bonus of $246,900 per employee, up 6% from the previous year.
The Wall Street windfall is also a boon to New York state and city tax revenues. The industry’s contribution to New York City’s tax collection increased 15.8% in fiscal year 2026 compared to the previous year. “As a proportion of the industry’s record profitability, securities tax revenues continue to reach new levels,” DiNapoli wrote in the report.
However, bond market volatility has increased in recent weeks. Rising interest rates could put pressure on Wall Street companies’ trading results, while dampening the outlook for the IPO and deal market, as well as the consumer. Wall Street is at the center of the AI boom, but is also exposed to any slowdown or fading of enthusiasm.
“As the industry continues to post strong profits, concerns are growing over ongoing geopolitical conflicts, inflation and interest rates, outsized contributions from the burgeoning AI sector, and deregulatory efforts by the current administration,” DiNapoli wrote.
He added that “the potential for an industry downturn presents a growing risk to public finances and the regional economy as a whole.”
Gn bussni
