NEW YORK, May 30 (Reuters) - Key U.S. economic data,

developments with federal tax-and-spending legislation and

twists and turns on trade all are poised to influence equities

in the coming week, with the U.S. market closing in on record

highs.

The S&P 500 ended on Friday with a weekly gain and

less than 4% from its February all-time high. The benchmark

index rose about 6.2% in May, while the Nasdaq Composite

surged 9.6%, with both indexes tallying their biggest monthly

increases since November 2023.

Investors at the end of the week were grappling with

implications from legal rulings involving efforts to block most

of President Donald Trump's tariffs. Trump's trade war has

whipsawed global markets for weeks on concerns about economic

fallout.

The coming week also brings a raft of economic and labor

market data, headlined by the monthly U.S. employment report out

on Friday.

"Now that we're back up here not all that far from the

record high, I think the hard data needs to hold in better than

the market expects to really advance from here," said Scott

Wren, senior global market strategist at the Wells Fargo

Investment Institute.

The employment report for May is expected to show an

increase of 130,000 jobs, according to a Reuters poll of

economists, which would be a step down from growth of 177,000

the prior month.

Investors have been eager to learn how Trump's tariffs may

be rippling through the economy, especially in the wake of his

April 2 "Liberation Day" announcement of sweeping levies on

imports.

The May data represents a full month of "how businesses have

been handling some of the tariff uncertainty and some of the

pressures in the market," said Anthony Saglimbene, chief market

strategist at Ameriprise Financial.

Still, an overly strong employment report, such as growth of

over 200,000 jobs, might be viewed warily by the market because

it could delay interest rate cuts by the Federal Reserve, said

Eric Kuby, chief investment officer at North Star Investment

Management Corp.

Investors have reduced bets in recent weeks on the amount of

expected Fed easing this year, with about two rate cuts priced

in by December, according to LSEG data.

Minutes of their latest meeting released this week showed

Fed officials acknowledged they could face "difficult tradeoffs"

in coming months with rising inflation alongside rising

unemployment.

Fiscal legislation in Washington will also be in focus. The

Senate will start considering a tax-and-spending bill passed

earlier this month by the House of Representatives. Trump said

this week he plans to negotiate aspects of the "big, beautiful"

tax bill, a day after billionaire Elon Musk said the bill

detracts from efforts to reduce the U.S. budget deficit.

The bill, which will add an estimated $3.8 trillion to the

federal government's $36.2 trillion in debt over the next

decade, has focused attention on the impact of increasing

deficits on the Treasury market. Rising bond yields have

pressured stocks in recent weeks.

The shifting tariff backdrop also appeared likely to

influence asset prices. Equities rebounded in recent weeks after

Trump eased his harshest tariffs, but the situation remains in

flux as Washington negotiates with trading partners.

On Thursday, for instance, stocks rose early the session

after a U.S. trade court blocked many of Trump's tariffs, but

gains faded during the session. Later, a federal appeals court

reinstated the tariffs, further muddying the backdrop.

"There's initial excitement and then the reality set in that

this is just another step in this process and it really hasn't

clarified very much," Kuby said.