NEW YORK, Aug 9 (Reuters) - A week of wild market swings

has investors looking ahead to inflation data, corporate

earnings and presidential polls for signals that could soothe a

recent outbreak of turbulence in U.S. stocks.

Following months of placid trading, U.S. stock volatility

has surged this month as a run of alarming data coincided with

the unwinding of a massive, yen-fueled carry trade to deal

equities their worst selloff of the year. The S&P 500 is

still down around 6% from a record high set last month, even

after making up ground in a series of rallies after Monday's

crushing selloff.

At issue for many investors is the trajectory of the U.S.

economy. After months of betting on an economic soft landing,

investors rushed to price in the risk of a more severe downturn,

following weaker-than-expected manufacturing and employment data

last week.

"Everybody is now worried about the economy," said Bob

Kalman, a portfolio manager at Miramar Capital. "We are moving

away from the greed portion of the program and now the market is

facing the fear of significant geopolitical risks, a hotly

contested election and volatility that is not going away."

Though stocks have rallied in recent days, traders believe

it will be a while before calm returns to markets. Indeed, the

historical behavior of the Cboe Volatility Index - which

saw its biggest one-day jump ever on Monday - shows that surges

of volatility usually take months to dissipate.

Known as Wall Street's fear gauge, the index measures demand

for options protection from market swings. When it closes above

35 - an elevated level that it topped on Monday - the index has

taken 170 sessions on average to return to 17.6, its long-term

median and a level associated with far less extreme investor

anxiety, a Reuters analysis showed.

One potential flashpoint will be when the U.S. reports

consumer price data on Wednesday. Signs that inflation is

dropping too steeply could bolster fears that the Federal

Reserve has sent the economy into a tailspin by leaving interest

rates elevated for too long, contributing to market turbulence.

For now, futures markets are pricing in a 55% chance the

central bank will bring down benchmark interest rates by 50

basis points in September, at its next policy meeting, compared

with a roughly 5% chance seen a month ago.

"Slower payroll growth reinforces that U.S. economic risks

are becoming more two-sided as inflation cools and activity

slows," said Oscar Munoz, chief U.S. macro strategist at TD

Securities, in a recent note.

Corporate earnings, meanwhile, have been neither strong

enough nor weak enough to give the market direction, said

Charles Lemonides, head of hedge fund ValueWorks LLC.

Overall, companies in the S&P 500 have reported

second-quarter results that are 4.1% above expectations, in line

with the long-term average of 4.2% above expectations, according

to LSEG data.

Walmart ( WMT ) and Home Depot ( HD ) are among companies

reporting earnings next week, with their results seen as

offering a snapshot on how U.S. consumers are holding up after

months of elevated interest rates.

The end of the month brings earnings from chip giant Nvidia ( NVDA )

, whose shares are up around 110% this year even after a

recent selloff. The Fed's annual Jackson Hole gathering, set for

Aug. 22-24, will give policymakers another chance to fine tune

their monetary policy message before their September meeting.

Lemonides believes the recent volatility is a healthy

correction during an otherwise strong bull market, and he

initiated a position in Amazon.com ( AMZN ) to take advantage of

its weakness.

The U.S. presidential race is also likely to ramp up

uncertainty.

Democrat Kamala Harris leads Republican Donald Trump 42% to

37% in the race for the Nov. 5 presidential election, according

to an Ipsos poll published on Thursday. Harris, the vice

president, entered the race on July 21 when President Joe Biden

folded his campaign following a disastrous debate performance on

June 27 against Trump.

With nearly three months until the Nov. 5 vote, investors

are braced for plenty of additional twists and turns in an

election year that has already been one of the most dramatic in

recent memory.

"While early events suggested a clearer picture of US

Presidential and Congressional outcomes, more recent events have

again thrown the outcome into doubt," analysts at JPMorgan

wrote.

Chris Marangi, co-chief investment officer of value at

Gabelli Funds, believes the election will add to market

volatility. At the same time, expected rate cuts in September

could boost a rotation into areas of the market that have lagged

in a year that has been dominated by Big Tech, he said.

"We expect increased volatility into the election but the

underlying rotation to continue as lower rates offset economic

weakness," he said.