Some analysts have been calling for the end of the earnings recession, based on the fact that forward earnings should show signs of improving.
"They're good relative to expectations, but I don't think we have enough yet to get a feel for how the year is going to go. Q1 didn't go the way that was hoped for. For the year, their [expected gains] are very back-end loaded, which is a problem," said Michael O'Rourke, chief market strategist at JonesTrading. "We're at all-time highs, with very high multiples."
Wednesday's after-the-bell earnings could have a push-pull effect on the Dow, as Dow components American Express rose on an earnings beat in after-hours trading, and Intel fell on a disappointing revenue miss.
S&P Global Market Intelligence sees a U-shaped recovery forming with earnings rising nearly 2 percent for the S&P companies year over year in Q3, after a decline of about 5 percent this quarter. By the fourth quarter, S&P analysts expect a near 8 percent earnings gain.
Of the 70 S&P 500 companies reporting as of Wednesday morning, 67 percent beat earnings estimates according to Thomson Reuters.
"We're drifting higher. It's more of a positioning, technical move coming out of the Brexit vote," said O'Rourke. "We need to get a little further into the earnings season to see how earnings will affect it. … It's more technicals driving the market. There's so many bearish themes and bearish reasons not to be in the market, so many people were on the sidelines," he said, adding as the market went higher some investors were forced to participate. "It's an absence of sellers. Some people's hands are being forced. They tried to buy the dip, and the dip is gone."
Besides earnings, traders will be watching some U.S. data and the European Central Bank's meeting and press conference ahead of the U.S. open.
Bank of America Merrill Lynch analysts said in a note that they expect no action at the ECB meeting. The Bank of England took no action at its meeting last week but hinted at further stimulus later in the summer.
"… resilient markets after the Brexit vote will, in our view, allow the ECB's Governing Council to stop at simply delivering hints at an imminent additional layer of stimulus on 21 July, reserving hard announcements for September," they wrote. The September meeting coincides with new inflation forecasts.
"We have no doubt continuing QE beyond March 2017 is necessary. Beyond the flat inflation outlook, we think financial and political stability risks in the periphery warrant continuous support from the central bank," they wrote.
They also expect ECB President Mario Draghi to be asked about the health of Italian banks during the press briefing.
In the U.S., jobless claims data and the Philadelphia Fed survey are expected at 8:30 a.m. EDT. The FHFA home price index is at 9 a.m., and the index of leading economic indicators and existing home sales are both due at 10 a.m. EDT.