Stocks are sliding toward a second straight month of declines and remain locked in a range that has defined the S&P 500 index for more than two months. If that's not dreary enough, we are heading into the traditional August lull in market action.

But that doesn't mean the current bull market is lost, according to Keith Lerner, chief market strategist at Truist. Although he sees a difficult setup for markets over the back half of the year, he remains convinced that stocks can extend the trend that has pushed them higher for much of the past four years.

"The bull market remains intact, but the bumpier second-half path we've anticipated is unfolding as tech and artificial intelligence uncertainty, geopolitical tensions, and higher interest rates converge," he said in a note published Thursday.

"Pullbacks are often the admission price investors pay for the potential of higher long-term equity returns," he added.

Stocks have fallen nearly 3% since hitting their all-time high on June 2, with a larger 7.7% decline booked for the tech-focused Nasdaq Composite index over the same time period. Despite Thursday's broad, solid rebound, both the Nasdaq and S&P 500 are likely to close out July with another set of losses following their respective June pullbacks of 1.1% and 2.8%.

Lerner sees the pullback as "more consistent with a reset than a change in the broader bull market trend" and tied to worries surrounding AI investment, Middle East tensions, and the path for higher Federal Reserve interest rates. All three were in focus on Thursday.

Meta Platforms fell more than 8%, testing its lowest levels of the year, after reporting second-quarter earnings that included a modest increase to capital spending plans and weaker-than-expected guidance on revenue.

Global oil prices held near $90 a barrel, having surged more than 25% so far this month, as the U.S. stepped up its attacks on Iran amid another collapse of peace talks.

Treasury yields, meanwhile, were holding near multi-year highs, with 30-year bonds trading at levels last seen prior to the global financial crisis. Fed Chairman Kevin Warsh delivered a confusing statement on rate policy Wednesday following the central bank's decision to hold its base lending rate at 3.5% to 3.75% for the seventh straight month.

Lerner, however, sees a solid mix of a resilient domestic economy, lower stock valuations, and impressive earnings estimates that continue to improve.

Second-quarter earnings, in fact, are likely to grow by around 27.7% compared to last year, with an overall tally north of $702 billion, according to LSEG forecasts. Around 85% of the 210 companies reporting have topped Wall Street forecasts, besting the four-quarter average of 80% and the longer-term trend of around 68%.

Profit growth over the back half of the year, meanwhile, is expected to grow by around 25%, before tailing off into the 2027.

Lerner doesn't rule out further weakness, with downside limited to a pullback of between 5% and 8% for the S&P 500, but he sees broader market gains into the end of the year.

"While the corrective process may not be complete, the weight of the evidence favors a reset within an ongoing bull market," he said.

"For investors with below-target equity exposure, we would use current weakness as an opportunity to add exposure and become more aggressive should markets move toward those support levels," he added.