Wall Street’s money machine is about to get tested

In a year when almost everything on Wall Street seems to be making money, the best trade may have been Wall Street itself.

The original forecast called for a much less profitable year: New York City expected securities industry profits to fall 30% to $45.3 billion as earnings returned to more typical levels.

Instead, Wall Street firms raked in $45.9 billion in profits during the first half of 2026 alone, up 51% from a year earlier and already more than New York City expected them to make in all of 2026, according to a new report from State Comptroller Thomas DiNapoli. Keep that pace up, and annual profits could blow past $90 billion.

Pick a fee, any fee

The first-half boom stretched well beyond traders riding volatile markets higher. Trading revenue rose just 1.8% to $40.3 billion, while underwriting revenue jumped 68% as companies rushed back to capital markets. Global equity issuance surged 76.5%, helped by SpaceX’s record IPO, while dealmaking also rebounded.

That means Wall Street was collecting fees almost everywhere money moved, from companies going public to corporations borrowing cash to dealmakers buying each other.

AI helped keep Wall Street’s money-making machine busy. The NY Comptroller estimates US AI capex will top $581 billion this year, and some of that spending is increasingly flowing through capital markets as hyperscalers raise money for chips, data centers, and other infrastructure.

That makes Wall Street something of a picks-and-shovels play on the AI boom. Banks don’t necessarily have to correctly predict which chipmaker or model wins—they can get paid helping everyone finance and trade the race.

And this broad first-half boom gives investors a useful map for next week’s bank earnings. After a cooling summer, we’re about to find out which parts of Wall Street’s money machine are still humming.

Now comes the test

Banks are already warning that Q3 won’t match Q2’s blowout trading results.

JPMorgan expects Q3 markets revenue and investment-banking fees to rise by mid-to-high teens percentages from a year earlier, compared with second-quarter growth of 35% and 30%, respectively. Bank of America is more cautious, forecasting roughly flat trading revenue and at least a 10% drop in investment-banking fees.

That makes bank earnings more than a check on bank stocks. Wall Street gets paid when companies and investors are willing to take risks. With trading normalizing, underwriting and advisory fees will show whether companies are still raising money and making deals, while bank executives’ pipelines will offer a read on whether that activity can carry into 2027.—HC