• First-half 2026 pretax profits hit $45.9 billion, up 51.3% year over year, already exceeding New York City's full-year forecast of $45.3 billion.
  • If the current pace holds, annual profits could top $90 billion, driven by AI spending, stronger M&A activity and elevated trading volumes.
  • The boom lifts tax revenue and employment, but heavy AI exposure and geopolitical risks cloud the outlook, according to New York State Comptroller Thomas DiNapoli.

Wall Street's broker-dealer operations are on track for a record year. According to the New York State Comptroller's October 6 report, pretax profits for the first half of 2026 reached $45.9 billion, a 51.3% jump from $30.4 billion a year earlier. That already surpasses New York City's $45.3 billion forecast for the entire year.

The surge extends a strong recovery. Full-year 2025 profits were $65.1 billion, up 30.4% from 2024—a nominal record, though not inflation-adjusted. The first-half 2026 figure covers the broker-dealer operations of 168 New York Stock Exchange member firms, not all bank earnings or S&P 500 results. Trading revenue rose just 1.8% to $40.3 billion, so the profit spike is not simply a trading story. Instead, it reflects a broader capital-markets rebound: revived mergers and acquisitions, a stronger IPO market and resilient lending, with AI investment acting as a key catalyst.

"What we're seeing is a confluence of factors—AI-driven dealmaking, pent-up demand for transactions, and a more permissive regulatory environment," said a person familiar with the comptroller's analysis. "It's not one thing."

Fiscal Windfall

The securities industry generated an estimated $26.3 billion for New York State in fiscal 2025–26, representing 20.8% of state tax collections, and $7.8 billion for New York City in city fiscal 2026, or 9.2% of its collections. The industry accounted for 18.8% of the city's economic output in 2024, with roughly one in 13 jobs directly or indirectly tied to it.

Employment is rising alongside profits. New York City added 5,300 securities jobs in preliminary 2026 data, on top of 207,400 in 2025. Compensation jumped 18.8% in the first half. DiNapoli now expects the 2026 bonus pool to increase, contrary to the city's earlier forecast of a 20% decline. The actual estimate will be released in March 2027 using tax-withholding data.

The gains are uneven. Average securities-industry compensation in New York City was $561,770 in 2025, more than five times the $106,880 average in the rest of the private sector. That disparity has drawn attention amid weak consumer confidence and persistent food and energy cost pressures.

Risks Loom

DiNapoli flagged several threats: global conflicts, inflation, rising interest rates and the industry's heavy exposure to AI. "The concentration in AI is a double-edged sword," he said in a statement. "It's driving profits now, but any slowdown in that spending would be felt quickly."

The comptroller also cited the current administration's deregulatory push as a risk, alongside the potential for a financial-market downturn. Lighter regulation has supported dealmaking, but questions remain about longer-term resilience. A recession or major market disruption would hit New York's tax base, given the industry's outsized contribution to public revenue.

The report did not introduce new policy or regulatory action. Spokespeople for the major Wall Street banks declined to comment or did not respond to requests for comment.

The near-term outlook remains favorable, but conditional. Simply repeating the first half's $45.9 billion would yield $91.8 billion for the year—a run-rate illustration, not a formal forecast. Whether AI-linked financing and deal activity evolve into durable growth, or remain dependent on unusually strong investment enthusiasm, is the central question.

Clarification: An earlier version of this article misstated the scope of the profit figures. They cover NYSE member firms' broker-dealer operations, not all financial-sector profits.