"Despite geopolitical tensions and economic uncertainty, the industry has remained resilient," DiNapoli said in a statement. Virtually every major revenue stream grew, with underwriting posting especially strong gains.
The AI spending spree became Wall Street's toll booth
Three engines powered the boom: massive AI capital spending, elevated trading in a volatile market, and dealmaking revived by a relaxed regulatory environment.
Bank earnings confirmed the frenzy: Goldman Sachs posted EPS of $20.98 against a roughly $14.50 estimate; JPMorgan reported its highest quarterly profit ever at $21.2 billion; Bank of America logged its 17th consecutive quarter of trading revenue growth; Citigroup posted its best quarterly revenue in a decade at $24.8 billion. Goldman's investment banking backlog sits at a five-year high.
But the good times may be peaking. On Monday, the 10-year Treasury yield — the benchmark that sets borrowing costs across the economy — hit 5.35%, its highest level since 2002. DiNapoli warned that rising rates "may dampen profitability" if dealmaking slows down or firms' interest liabilities rise significantly.
Higher yields push up the cost of borrowing from mortgages to auto loans, weighing on economic activity. They also raise risks for the stock market and could chill the hot IPO and dealmaking market. "Rising yields for bonds issued by the U.S. and other governments in recent weeks are another concerning indicator for investors," DiNapoli wrote.
A boom detached from how Americans feel
The irony is that Wall Street's celebration is detached from the economy most Americans live in. Consumer sentiment hovers at historic lows amid the cost of living, from rising energy prices to stubborn food inflation. Federal Reserve Bank of New York data show total household debt hit a record $18.8 trillion in the first quarter of 2026, with Americans owing more than $1 trillion on credit cards and delinquencies climbing to levels not seen since the aftermath of the Great Recession.
Wall Street bonuses are expected to hit an all-time high while families lean on borrowed money to get by. That contrast is itself the biggest uncertainty for the second half: if high rates finally crush consumer spending and corporate financing demand, Wall Street's fee machine slows too. The coming weeks of third-quarter bank earnings will be the first test of whether the machine is still humming.
