U.S. markets showed signs of recovering Monday despite a 5 percent decline in Chinese stocks, but even if traders look past an additional sell-off in Asia, they face another tough earnings season, experts told CNBC.
Last week, U.S. stocks turned in their worst first five-day opening to a year on record as China's markets slid and crude prices hit new multiyear lows.
A string of yuan devaluations in China has created a negative feedback loop, undermined currency markets and caused investors to question the ability of Chinese leaders to manage their economy, said David Lebovitz, global market strategist at JPMorgan Asset Management.
But U.S. markets were up in premarket trading before slipping in late-morning trade, despite the Asian equity tumble.
"Hopefully what we're beginning to see is investors look through a lot of the noise, which is coming out of China right now," he told CNBC's "Squawk Box." "Hopefully we're looking through that, we're focusing more on the fundamentals, we're focusing more on earnings, and as we embark on earnings season we get some positive data bringing people back into the stock market."
Ultimately, investors need to see earnings growth for markets to move higher, Lebovitz said. But the outlook is not bright.
S&P Capital IQ forecasts fourth-quarter S&P 500 earnings will decline 5.7 percent year over year, marking the first back-to-back quarters of earnings declines since 2009. S&P earnings fell 1.4 percent in the third quarter.
Just 4 of 10 S&P sectors — telecommunications, consumer discretionary, health care and financials — are expected to turn in positive earnings growth for the fourth quarter.