US Stock Market Trading Outlook For August 17-21: Bulls Vs Bears? What Will Impact Dow Jones, Nasdaq, S&P 500?

The US stock market is likely to witness a mild bullish trend in the upcoming trading week from August 17th to August 21st. However, experts believe this forecast could be challenged if there are any negative developments between the US and Iran. Beyond the Middle East crisis, Wall Street is currently in a mid-term phase, with August and September being historically bearish months with the upcoming US Federal Reserve's policy in focus. Also, the US Treasury yield of 30-year benchmark spiked to a 25-year high, signaling investors' appetite for long-term US debt rather than equities. Last week, the Dow Jones emerged as the top loser, while the Nasdaq and S&P 500 marginally scratched the surface of the green zone.

What Is Happening In US Stock Market:

As per Charles Schwab's strategist, Wall Street stocks are currently in melt-up mode, coupled with relatively low volatility and relatively low summertime volume. Also potentially assisting the recent rise is investor sentiment, which is bullish but also contains a healthy level of skepticism.

Last week, the Dow Jones or DJIA index witnessed a 0.63% or 340.25-point, weekly drop to close at 53,732.41. On the other hand, the Nasdaq Composite closed at 26,729.16 with gains of 48.72 points or 0.18% in 5 days. And the S&P 500 index ended at 7,785.76, marginally rising by 34.02 points or 0.44%.

The US market witnessed some of the major economic reports along with AI and tech earnings, leading to stock-specific actions. Among the major data were CPI, PPI and retail sales.

US CPI softened better than expected to 3.4% in July 2026 compared to 3.5% in June, which was in-line with expectations. The CPI has moved further away from its 2023 high of 4.2%. While the PPI index stood at 4.7% in July. Also, the retail sales was softer than expected.

The University of Michigan's preliminary August sentiment index fell to 51, below forecasts of 55. Meanwhile, retail sales dropped in July by the most in over a year. The data, alongside weak jobs figures and soft inflation, suggested that the economy is showing signs of cooling. A slowdown in consumer spending could weigh on corporate profits and the stock market, as per Trading Economics data.

US Stock Market Weekly Outlook:

"Although some modest consolidation wouldn't surprise me at some point next week, the path of least resistance is likely still higher. Therefore, I'll provide a "Slightly Bullish" forecast for next week, which could include some healthy digestion of recent gains. What could challenge my forecast? The most obvious catalyst would be a negative development out of the Middle East," said Nathan Peterson, Director of Derivatives Research and Strategy for the Schwab Center for Financial Research in a note.

He added, "Anything can happen at any time concerning geopolitical headline risk, but as for next week, it doesn't seem to me that there is a lot out there to alter the recent script, which is stocks are in melt-up mode."

Are There Risks To Bulls In Wall Street?

In Schwab's note, yes! Adding it said, "Aside from the Iran conflict, we are in a seasonally bearish time for stocks (August/September), we are in a midterm year (which historically has encountered a market pullback), we have a new Fed Chair who is intentionally opaque, and 30-year Treasury yields have pushed up to fresh cycle highs. Worth mentioning here, yesterday's 30-year Treasury auction went off at a 25-year high of 5.216%, which conveys investor appetite (or lack thereof) for longer-term U.S. debt."

Peterson added, "Perhaps higher borrowing costs and declining equity risk premium can be overlooked by stock investors as long as the trajectory of U.S. corporate earnings growth continues to trend higher. However, make no mistake that this market/economy is being fueled by the AI infrastructure buildout, and that buildout will need to be supported by strong adoption and sound economics over the next several years in order to validate the massive investments."

Key Important Economic Data And Earnings To Watch Out Next Week

Monday, August 17, 2026:

Among economic data, watch out for Empire State Manufacturing, NAHB Housing Market Index, Net Long-Term TIC Flows.

While companies like Fabrinet (FN), H World Group Ltd. (HTHT), and XP Inc. (XP) are scheduled to declare their quarterly result.

Tuesday, August 18, 2026:

Building Permits, Capacity Utilization, Export Prices, Housing Starts, Import Prices, Industrial Production, and Pending Home Sales are some of the important economic data to release on Tuesday.

Companies such as Amer Sports Inc. (AS), Baidu Inc. (BIDU), Hesai Group (HSAI), Home Depot Inc. (HD), Jack & Henry Associates Inc. (JKHY), Keysight Technologies Inc. (KEYS), Klarna Group PLC (KLAR), La-Z-Boy Inc. (LZB), Pony AI Inc. (PONY), Toll Brothers Inc. (TOL), VNET Group Inc. (VNET), and ZTO Express Inc. (ZTO) will be in focus for their quarterly results.

Wednesday, August 19, 2026:

In case of data, investors will focus on EIA Crude Oil Inventories, and MBA Mortgage Applications Index.

Under corporate earnings, Analog Devices Inc. (ADI), BILL Holdings Inc. (BILL), Coty Inc. (COTY), Estee Lauder Companies Inc. (EL), Full Truck Alliance Co. (YMM), Lowe's Companies (LOW), Nordson Corp. (NDSN), Target corp. (TGT), TJX Companies Inc. (TJX), Viking Holdings Ltd. (VIK), and ZIM Integrated Shipping (ZIM) will have the limelight.

Thursday, August 20, 2026:

Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Leading Economic Index, and Philadelphia Fed Index are scheduled to release on Thursday.

Among earnings, Advance Auto Parts Inc. (AAP), Alibaba Group Holding Ltd. (BABA), Alour Lifestyle Holdings Ltd. (ATAT), Autohome Inc. (ATHM), Deere & Co. (DE), Futu Holdings Ltd. (FUTU), NetEase Inc. (NTES), OSI systems Inc. (OSIS), Ross Stores Inc. (ROST), and Walmart Inc. (WMT) will be in focus.

Friday, August 21, 2026:

Friday will see major movements in market as data of S&P Global U.S. Manufacturing Index, and S&P Global U.S. Services PMI is scheduled.

Further, companies like BJ's Wholesale Club Holdings Inc. (BJ), Buckle Inc. (BKE), Ke Holdings Inc. (BEKE), MINISO Group Holdings Ltd. (MNSO), and Ubiquiti Inc. (UI) will announce their quarterly reports.

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