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There is Brexit uncertainty, but earnings will soon drive US stocks, experts say

The stock market's upturn Tuesday after two days of post-Brexit sell-offs had many on Wall Street wondering if it was a so-called dead cat bounce.

The Dow Jones industrial average on Tuesday closed almost 270 points higher. On Monday, U.S. stocks extended Friday's plunge with a declines of 1.5 percent or more that took the S&P 500 and Dow to their lowest closes since March 10.

While there is much uncertainty right now surrounding the impact of the U.K.'s vote to leave the European Union, the focus will soon be back on U.S. corporate earnings, said Dan Skelly, head of equity model portfolio solutions at Morgan Stanley Wealth Management.

And he believes that should be good news for the U.S. stock market.

"When you look at first-quarter earnings, we think that we actually saw the trough in this cycle recently," he said in an interview with CNBC's "Power Lunch" Tuesday.

A trader touches his head as he works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 24, 2016.
Lucas Jackson | Reuters
A trader touches his head as he works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 24, 2016.

Plus, "when you are looking at other drivers of the U.S. domestic economy, namely housing, I think there will be some really strong solid trends that won't be as affected by this update with Brexit."

Michael Cuggino, president of Permanent Portfolio, said it isn't known if Brexit will be negative or positive for Britain, Europe or the U.S. going forward, and noted the markets may trade on the news and the negotiations for a long time.

However, the market will also quickly pivot to corporate earnings, which "may be starting to bottom out," Cuggino told "Power Lunch." Just how much better second-quarter earnings will be is unclear, thanks to low-growth GDP that is good but not robust, he added.

Plus, there is still not very good revenue growth overall, Cuggino said.

"I think that is really the next significant leg up for the stock market. We need that top-line growth, we need robust growth, we need revenue growth."

— CNBC's Evelyn Cheng contributed to this report.