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As third-quarter earnings season gets underway, expectations for full-year earnings have turned negative.

According to data from S&P Investment Advisory Services, estimates for Q3, Q4 and 2015 have all been revised down in the past week. Earnings expectations for 2015 have turned from 0.2 percent growth to a 0.9 percent decline. Full-year earnings haven't fallen since 2009, when earnings dropped 9 percent.

Meanwhile, stocks have held on to recent gains, with the rising 1.5 percent on Thursday.

Erin Gibbs, equity chief investment officer of S&P Investment Advisory Services, said she thinks the market may be underestimating poor earnings growth. Although estimates generally see more swings during earnings season, Gibbs said, the bleak revisions could be cause for concern.

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"Right now, the decline in earnings has been so great that it's actually pushed forward valuations up above levels that we've seen over the past two months," Gibbs said Thursday on CNBC's "Trading Nation."

She said the S&P is currently trading at 16.5 times forward earnings, but could easily fall back to 15.5 times forward earnings as investors see continued contractions in earnings.

"If this trend continues, particularly as we move through Q3, we could really see a downturn," Gibbs said.

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However, Larry McDonald of Societe Generale said poor earnings could actually be good news for stocks, if it prompts the Federal Reserve to keep interest rates low to accommodate a weaker economy.

"We've had Fed policy influencing stock prices for six years now, and even though we have a problem with earnings, a dovish Fed supports stock prices," McDonald said Thursday on "Trading Nation."

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