In C, how should I read a text file and print all strings

The simplest way is to read a character, and print it right after reading:

int c;
FILE *file;
file = fopen("test.txt", "r");
if (file) {
    while ((c = getc(file)) != EOF)
        putchar(c);
    fclose(file);
}

c is int above, since EOF is a negative number, and a plain char may be unsigned.

If you want to read the file in chunks, but without dynamic memory allocation, you can do:

#define CHUNK 1024 /* read 1024 bytes at a time */
char buf[CHUNK];
FILE *file;
size_t nread;

file = fopen("test.txt", "r");
if (file) {
    while ((nread = fread(buf, 1, sizeof buf, file)) > 0)
        fwrite(buf, 1, nread, stdout);
    if (ferror(file)) {
        /* deal with error */
    }
    fclose(file);
}

The second method above is essentially how you will read a file with a dynamically allocated array:

char *buf = malloc(chunk);

if (buf == NULL) {
    /* deal with malloc() failure */
}

/* otherwise do this.  Note 'chunk' instead of 'sizeof buf' */
while ((nread = fread(buf, 1, chunk, file)) > 0) {
    /* as above */
}

Your method of fscanf() with %s as format loses information about whitespace in the file, so it is not exactly copying a file to stdout.