U.S. markets and stock exchange traded funds extended their rebound Thursday, erasing most of the recent trade-induced losses over the past week, as upbeat first quarter earnings and economic data help fuel risk-on sentiment.

On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) increased 1.0%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) 0.9% and SPDR S&P 500 ETF (NYSEArca: SPY) advanced 0.9%.

The more positive mood also helped the S&P 500 recover within 2% of its all-time high reached at the end of April.

While the U.S.-China standoff remains a lingering concern that overhangs the market, the positive quarterly numbers helped assuage investors’ concerns, with Walmart (NYSE: WMT) beating analysts expectations and Cisco Systems (NasdaqGS: CSCO) experiencing its best daily gain in three years on better-than-expected results, Reuters reports.

The better-than-expected first-quarter earnings season is beginning to wind down after 457 S&P 500 companies reported. Of those reported, about 75% have beaten profit expectations, according to Refinitiv data. Analysts now anticipate first-quarter earnings growth of 1.4%, compared to the 2% loss previously projected back in April 1.

Further fueling market optimism, the Commerce Department revealed that groundbreaking on new U.S. homes increased more than expected in April as declining interest rates in light of the Federal Reserve’s more patient stance on monetary policy helped support the struggling housing sector.

Additionally, the Labor Department said the number of Americans applying for unemployment fell more than expected last week.

“Outside of the trade conflict, we’re seeing healthy earnings, good valuations and signs of economic growth re-accelerating,” David Carter, chief investment officer at Lenox Wealth Advisors, told Reuters. “However, the trade conflict will be the key driver going forward.”

Meanwhile, the semiconductors segment lagged behind the broad market rally after Washington placed Huawei Technologies Co. on a blacklist, which bans the Chinese firm from acquiring components and technology from U.S. firms without prior approval. Huawei is a leader in 5G technology and a major buyer of U.S. chipmakers.

“This may be a precursor to a continued and larger trade conflict,” Carter added.

For more information on the markets, visit our current affairs category.

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