US Stocks Poised for Moderate Gains Amid Earnings Season and Economic Reports

The US stock market is expected to remain moderately bullish in the trading week from August 10th to August 14th, following last week's strong gains despite a decline in nonfarm payroll data and unemployment rate. The Dow Jones, Nasdaq, and S&P 500 indices held their ground, with the Dow ending at 54,036.93 after gaining 1,277.87 points or 2.42%, outperforming other indices.

According to Nathan Peterson, Director of Derivatives Research and Strategy for the Schwab Center for Financial Research, investors have overbought on a very near-term basis due to the strong week, but the momentum remains to the upside. He believes that the outlook favors the bulls due to technicals/momentum, potential performance chasing, and short covering.

The upcoming trading week will see major economic reports such as US inflation data (CPI/PPI) and several earnings reports from AI companies. Peterson also noted that August is not a strong month for stocks from a seasonal factor, but the Iran war is a wild card that could impact market sentiment.