The Dow Jones Industrial Average (DJINDICES:^DJI) was trading 37 points lower, or 0.22%, by midafternoon as global concerns regarding the escalating military conflict in Gaza and continued worries on the Ukraine-Russian border seemed to weigh on investors. However, the adverse impact on the market appears limited.

"When you have interest rates as low as they are it really dampens stock market volatility tremendously," Rick Meckler, president of LibertyView Capital Management, told Reuters. "It takes very significant, serious international activity to change that volatility level." 

As earnings season rolls on investors will hope for strong overall reports to help boost the markets. With that in mind, a major Dow component is making headlines before its second-quarter earnings report this week.

Caterpillar (NYSE:CAT) said it believes it will "more likely than not" win the tax case in which the IRS has questioned the company's recording of foreign profits. According to The Wall Street Journal, a Senate subcommittee estimated Caterpillar had avoided or delayed payments on more than $2.4 billion of U.S. taxes since 1999.

Caterpillar created a Swiss unit that bought expensive parts directly from suppliers and effectively removed the company from the transaction, thus dampening its U.S. tax liabilities. This won't be the last time investors in the heavy-machinery maker hear about this, and the IRS will likely take up to 12 months to make its final conclusion. Should the IRS rule against Caterpillar, the industrial juggernaut would likely appeal the decision and drag this scenario out for years.

Meanwhile, investors looking to Caterpillar's earnings release hope the company can shake off weakness in overseas mining markets that has sent profits in its resource industries segment plunging. Caterpillar supplies heavy mining machinery to these markets, so their weakness has been devastating to the company's bottom line and has turned its most profitable segment into its least profitable.

Chart by author. Information source: Caterpillar's SEC filings.

Outside the Dow, General Motors (NYSE:GM) is also gearing up to issue its second-quarter report this week. General Motors sold more than 2.5 million vehicles globally in the second quarter, a meager 0.5% gain from the same period last year.

While that gain was less than impressive, it should be noted that GM's year-over-year sales in the United States and China were up a respective 7% and 8% in the second quarter. Those two markets are the world's largest and the most profitable for GM.

As GM's sales rise in its most profitable regions, Citigroup's Itay Michaeli believes America's largest automaker will beat estimates for the second quarter. When excluding recall costs, Michaeli and his team believe GM's margins in North America will reach roughly 11%, which would be a significant improvement compared to the last couple years and would help drive adjusted profits higher. 

Daniel Miller owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.