Market watchers eye when the earnings recession will end

Roughly three-quarters of the companies have reported earnings so far, and it remains to be seen when the market will break out of an earnings recession.

First-quarter earnings were down 5 percent, while the second-quarter has improved but is still down 2.4 percent so far compared to the year-earlier period. Thomson Reuters projects third and fourth quarter-earnings will grow 0.2 percent and 8.5 percent, respectively

Sectors like energy and financials are expected to lead the way. If both sectors underperform, the overall effect on the market will likely be limited, Zachary Karabell of Envestnet told CNBC's "Power Lunch" on Wednesday.

"The energy complex just has to stop falling, for the rest to rise" said Karabell. "Market leadership has been given up by the financials incrementally year by year since the financial crisis."

— CNBC's Bob Pisani contributed to this report.