Year-end bonuses on Wall Street are expected to rise for the first time in two years as the U.S. stock market continues to boom.
The New York State Comptroller’s Office is forecasting that bonuses on Wall Street will increase this December by 7.4%. That would mark a big turnaround for America’s financial center. Bonuses had declined over the past two years amid a bear market that occurred in 2022, and as deals such a mergers and acquisitions (M&A) and initial public offerings (IPO) disappeared coming out of the pandemic.
But now, Wall Street appears to be in a celebratory mood as the stock market rallies and deals recover. The benchmark S&P 500 index is up 21% so far this year. Declining interest rates and a resilient economy also have traders and analysts on Wall Street feeling buoyant heading into 2025.
Compensating Traders and Dealmakers
Bonuses are a huge part of people’s compensation on Wall Street, making up more than half of some people’s annual salary. The average Wall Street bonus in 2023 was $176,500, down 2% from 2022, according to the New York State Comptroller’s Office, which tracks income tax payments.
Wall Street continues to be a major economic engine for New York, with nearly 10% of all jobs in the city directly tied to the stock market and securities industry. This year, Wall Street is expected to contribute more than $5 billion in tax revenue to New York City, according to the Comptroller’s Office.
Is the SPDR S&P 500 ETF Trust a Buy?
The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, has a consensus Moderate Buy rating among 504 Wall Street analysts. That rating is based on 403 Buy, 93 Hold and eight Sell recommendations issued in the last three months. The average SPY price target of $625.36 implies 8.92% upside from current levels.
