U.S. markets are trading lower Thursday morning after rallying Wednesday afternoon. The Dow Jones Industrial Average (^DJI) closed up 0.39% to 14,512 on Wednesday and the S&P 500 (^GSPC) ended yesterday's session up 0.68% to 1,559 after Fed Chairman Ben Bernanke reiterated his pledge to keep the monetary spigot flowing.

Related: There are No Bubbles, QE Is Working!

Despite some improving economic signs from the housing and labor markets, the Fed gave several reasons why it will continue its monthly $85 billion stimulus program. Those roadblocks include the 7.7% national unemployment rate, fiscal constraints in Washington and an economic recession and sovereign debt crisis in Europe.

Even as the economy seems to be picking up steam, there are signs that there's trouble ahead for U.S. multinational firms.

Take for example:

• Oracle (ORCL) reporting disappointing earnings results after the bell Wednesday. The company blamed poor performance by its sales force for the decline in revenues, not lack of demand.

• Caterpillar (CAT) reporting a 13% decline in machinery sales from December to February.

• FedEx (FDX) reporting a massive drop in net income last quarter. The bellwether for economic growth reported earnings of $1.23 per share, down from $1.55 a share a year earlier. Analysts were predicting earnings of $1.38 a share.

• European PMI fell to 46.5 from 47.9 in March. A number below 50 represents a contraction in output.

• And, last, but not least, the Cyprus banking crisis.

Related: Cyprus May Have to Leave the Eurozone, Sparking Bigger Crisis: Marc Chandler

Investors seem to be shaking off the bad news. The S&P 500 Index came within four points of closing at its all-time high Wednesday and the Dow hit a new intra-day trading high the same day. The S&P is up 9% over the last three months and the Dow is up 12%.

So, how long can the markets stay elevated in the face of all this negativity?

"Probably for a while," says Yahoo! Finance senior columnist Michael Santoli, who adds that Bernanke and the Fed are setting the tone. "It is the context for how the whole financial markets are operating."

Investors have been assured not to worry about the downside risks right now because the Fed continues to boost financial assets with low interests rates and quantitative easing, says Santoli. "It is a little bit of a support underneath stock prices."

As for Cyprus, Santoli does not believe it will have a huge impact on financial markets.

Related: Why the Cyprus Bail In Is a Bigger Deal Than You Think

"To me the transition mechanism from Cyprus to world capital markets is not very direct at this point, because the euro is not collapsing," he says, adding that the banking system has not seized up yet. "And I think the more people have looked at it, having not really studied Cyprus before, the more you realize what a one-off situation it is in terms of the extraordinary lopsided size of its banking system to its tiny economy."

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