U.S. equities and stock exchange traded funds were maintaining record levels Monday as traders optimistically looked toward quarterly earnings.

The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV) and Vanguard 500 Index (NYSEARCA:VOO), were 0.1% higher Monday.

Traders were prepping for a busy weak of corporate earnings, with Netflix (NasdaqGS:NFLX) set to reveal results after the close. Later in the week, tech firms like Microsoft (NasdaqGS:MSFT) and eBay (NasdaqGS:EBAY), along with banks like Goldman Sachs Group (NYSE:GS), Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) will report quarterly earnings.

According to FactSet data, of the 6% of S&P 500 companies that have revealed second quarter results as of Friday, 80% have beaten analysts’ estimates, the Wall Street Journal reports.

The earnings season will be closely monitored as traders see if the high valuations and record levels in the equities markets are justified in the face of weak inflation and recent batch of mixed economic news.

The S&P 500 has been trading around 18 times earnings estimates for the next 12 months, compared to historical averages of 15 times.

Related: Tech Keeps U.S. Stock ETFs Going Ahead of Earnings Season

Friday’s softer-than-expected U.S. economic data also weighed on expectations for further Federal Reserve interest rate hikes. According to Fed funds futures tracked by CME Group, options traders anticipate a 48% chance of a rate hike by year’s end, compared to a 59% a week ago.

“After new highs that we saw last week, the market deserves a rest as investors await big earnings this week,” Dave Donabedian, chief investment officer of CIBC Atlantic Trust Private Wealth Management, told Reuters. “Our view is that right now the equity market is a one-legged stool that’s driven by earnings and we’re pretty optimistic about earnings but if that should falter, the market will falter.”

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