Next week's economic reports will either assure the markets that the economy can transition to more moderate growth with subdued inflation or serve to aggravate recent fears," said Lynn Reaser, chief economist of Bank of America Capital Management.
"We expect numbers to indicate somewhat more balanced performance, which should help most industry groups, including technology, financial services and the more cyclical areas," Reaser said.
"For the first time in a couple of weeks we'll have significant news on U.S. economic performance," remarked Clark Yingst, market analyst at Prudential Securities.
"We know the Fed is concerned about pressures on the cost of labor. Unfortunately, we're likely to see more tightness in the labor markets. The situation won't change overnight," Yingst added.
Every piece of data has the potential to take the market down, according to Mike Holland, president of Holland & Co. "There are a lot of frayed nerves out there."
People are worried that the Fed will overdo it on the tightening front, Holland said, and until that sentiment prevails, market volatility will remain the name of the game.
On the week, the Dow Industrials fell 3.0 percent and is down 10.4 percent for the year. The Nasdaq, meanwhile, fell 5.4 percent this week and is down 21 percent for the year.
Monday: Markets closed for Memorial Day Holiday.
Tuesday: May consumer confidence.
Wednesday: April new home sales, April leading economic indicators, and Chicago Purchasing Managers index for May.
Thursday: Weekly initial claims, May National Association of Purchasing Management index and April construction spending.
Friday: May employment report, including non-farm payrolls, average hourly earnings and the unemployment rate; April factory orders.