Stock market correction will be "fleeting": Wall Street believes that optimism about artificial intelligence and rate cuts will drive the rebound.

President Trump's tariff policy has not been enough to reverse the stock market's momentum last week, with the S&P 500 and Nasdaq Composite indices continuing to hover near historical highs. Wall Street strategists point out that other factors are driving the major stock indices higher: optimism for artificial intelligence trading, and expectations for a rate cut by the Federal Reserve in September. "August is likely to be a slightly volatile month," Gargi Chaudhuri, Chief Investment and Portfolio Strategist for BlackRock Americas, told Yahoo Finance on Thursday morning. "I don't think any pullbacks we see in the market will be sustained for too long. I think they are essentially short-lived," she added, emphasizing that investors may want to consider adding short-term fixed income investments to their portfolio for diversification.