Wall Street’s biggest names, Goldman Sachs and Morgan Stanley, are set to release earnings this week, with analysts eyeing their investment banking segments. After a year of volatile markets, the firms’ advisory and underwriting businesses are expected to rebound, reflecting renewed confidence among corporate clients for the next quarter and the broader economy.

Market watchers attribute the optimism to a surge in mergers and acquisitions activity and a rebound in IPO filings, which have lifted deal flow. The uptick in dealmaking signals that companies are once again seeking capital, a trend that could lift earnings for banks that thrive on transaction fees and strengthen their balance sheets.

Investors will watch the earnings releases for clues on how the banks’ profit margins hold up amid rising interest rates. Analysts predict that stronger deal volumes could offset pressure from higher borrowing costs, but the real test will be whether the firms can sustain growth in a tightening credit environment and maintain shareholder confidence.