The Wall Street bull is still roaring

Axios

27-03-2025

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.