Key facts
- Wall Street bonuses are projected to increase by up to 30% for some financial sectors.
- Equity traders are expected to lead the gains with bonus increases ranging from 20% to 30%.
- Major US stock indexes, including the S&P 500 and Nasdaq, have reached record highs this year.
- US GDP saw a rebound to 3% growth in the second quarter, and inflation has moderated.
- Last year, average bonuses climbed by nearly 33% to $244,700.
Wall Street workers are anticipating a significant rebound in bonuses for the current year, with some sectors, particularly equity trading, expected to see increases of up to 30%. This positive outlook, detailed in a report by Johnson Associates, contrasts sharply with earlier predictions that warned of bonus decreases as high as 20% due to President Donald Trump's trade policies.
The improved forecast is largely attributed to the strong performance of financial markets, which have largely recovered from initial volatility and are trading at or near record highs. The S&P 500 has gained approximately 7.9% year-to-date, while the Nasdaq has surged over 9%. The Dow Jones Industrial Average has also seen a modest increase of around 4%.
Economically, the United States has shown signs of recovery, with GDP rebounding to 3% growth in the second quarter after a contraction in the first. Inflation has also moderated, falling to 2.7% in June from 3.0% in January, providing a more stable economic backdrop.
Equity traders are projected to benefit the most, with bonuses potentially rising by 20% to 30%. Those involved in bond trading and fixed-income products can expect increases of 10% to 20%, while debt underwriters may see a 5% to 15% bump. Other areas such as retail and commercial banking, asset management, investment banking advisory, and hedge funds could receive up to a 7.5% increase.
Last year, the financial industry saw a substantial average bonus increase of nearly 33%, reaching $244,700, with total bonus payouts estimated at a record $47.5 billion. The finance sector remains a critical component of New York's economy, accounting for a significant portion of the state's tax collections and city revenue, with employment levels exceeding previous peaks.
A law firm that previously represented Johnny Depp and Kanye West has been appointed by a former star fund manager ahead of a showdown with UK regulators.