The Wall Street bull is still roaring
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Illustration: Megan Robinson/Axios
Wall Street had a banner year in 2024. The stock market volatility we've seen so far in 2025 isn't going to change its fortunes very much.
Why it matters: As is often said, the stock market is not the economy. By the same token, Wall Street is not the stock market.
- Indeed, when the market goes through a period of high-volatility down days, traders can end up making enormous profits.
Driving the news: Last year turns out to have been even better than many thought: The bonus pool divvied up by New York securities firms hit a new record high of $47.5 billion in 2024, per New York State Comptroller Thomas DiNapoli.
- If you look instead at the broad banking system, total revenue hit a record high of $856 billion in 2024, per Sifma.
- Net income of $198 billion was second only to the boom year of 2021.
Zoom out: Wall Street makes money in lots of different ways.
- The revenue stream most correlated to the level of the stock market is asset management fees, which are generally set as a percentage of total assets managed. When those assets go up in price, the fee income goes up, too.
- Traders, however, tend to make their biggest profits during periods of volatility, rather than from boringly strong markets. They also benefit when a lot of small individual investors start trading the markets, as they're doing at the moment.
- When banks lend money, their profit — net interest income — tends to be high when interest rates are elevated, as they are now.
- Then there's dealmaking. That's still looking slow, but sluggishness here doesn't seem to have hurt the bottom line of the industry as a whole.
What they're saying: "Wall Street finds a way," quips New York Deputy Comptroller Rahul Jain.
- "Just because the Dow or the NASDAQ is down today does not mean that it's going to be a bad year for the securities industry," he tells Axios.
Between the lines: The industry is still adding jobs, with employment in New York state alone rising above 200,000 in 2024 for the first time in decades.
What to watch: While neither the bonus data nor Sifma's profit data includes pure crypto firms, there's still abundant optimism that the crypto-friendly Trump administration will allow a whole suite of new products that could drive fresh revenue in this and coming years.
- Many firms are also eyeing a future where AI could replace many of their very expensive employees, which would also be bullish for corporate profits.
The bottom line: Wall Street will always have something to worry about, whether it's the stock market or interest rates or tariffs or general dealmaking uncertainty.
- So far, however, none of those worries seem to have done much damage to the industry as a whole.
