Nearly 90 percent of S&P 500 companies have reported quarterly results thus far. Of those companies, 76 percent have reported better-than-expected earnings. Overall, S&P 500 earnings for the second quarter are up more than 24 percent versus the year-earlier period.
Booking Holdings and Norwegian Cruise Line both reported better-than-expected earnings on Thursday. Shares of Norwegian Cruise Line rose more than 4 percent, but Booking Holdings fell after issuing a weak third-quarter profit forecast.
"Earnings drive markets and earnings have been fantastic," said JJ Kinahan, chief market strategist at TD Ameritrade. "As much as people want to talk about fear, the Vix, gold and a lot of other things are telling you that maybe you should not be so fearful."
The Cboe Volatility Index (VIX), widely considered to be the best fear gauge in the market traded at 11.2 after hitting its lowest level since mid-January. Meanwhile, gold futures are trading near their lowest levels in over a year.
Trade tensions have simmered throughout the strong earnings season, however. Beijing announced Wednesday it would counter the most recent round of U.S. tariffs with its own. The Chinese Ministry of Commerce announced a 25 percent charge on $16 billion worth of U.S. goods. In total, 333 goods have been picked out by China, including vehicles, various types of fuels, recyclables and fiber optical cables.
It followed an announcement by the U.S. Trade Representative's office that the States would begin gathering levies on an additional $16 billion in Chinese goods from later this month.
Trade is "in the headlines and people think about it, but investors are also realizing ... the trade war is a long game and every piece of news we get is a piece of the puzzle," said Craig Birk, chief investment officer at Personal Capital.
The producer's price index remained unchanged in July, while economists polled by Reuters expected a gain of 0.2 percent. The report comes as the latest reading of the consumer price index — a key metric for inflation — is set for release on Friday.
Investors will be looking at the index for clues about the Federal Reserve's latest monetary policy moves. However, Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management, says the central bank will keep tightening monetary policy at a gradual pace. "Given how far into uncharted territory they have gone, they have been forced to gradually inch the ball moving forward," Schutte said.
Correction: The Nasdaq was on pace for an 8-day winning streak. The headline on an earlier version misstated the length of the winning streak.