* Nonfarm payrolls report due August 7, job growth of 91,000

seen

* One-fourth of S&P 500 results due, including Lilly, AMD,

Palantir ( PLTR )

* Elon Musk's SpaceX set to give first quarterly report

By Lewis Krauskopf

NEW YORK, July 31 (Reuters) - U.S. employment data and a

batch of corporate results this coming week will keep equity

investors on edge over the direction of the stock market, which

has been buffeted by geopolitical tensions, uncertain

interest-rate policy and sizable moves in heavyweight technology

shares.

The S&P 500 was on track for a slim weekly gain as of

Thursday, after some big daily swings, and was roughly 2.3%

below the benchmark index's June 2 record high.

Investors were digesting contrasting earnings reactions from

Microsoft ( MSFT ) and Meta Platforms ( META ) - two megacap

companies whose massive AI spending has been at the heart of the

bullish AI trade this year. Microsoft ( MSFT ) shares posted their

biggest single-day percentage jump since 2008 after its upbeat

forecast on cloud growth, while Meta's tumbled after it reported

a plunge in cash flow.

The Federal Reserve's monetary policy meeting and resulting

"hawkish hold" on Wednesday also left investors unclear about

the implications for stocks amid what many said were mixed

messages over the central bank's plan for reining in inflation.

The monthly U.S. jobs report, due on August 7, will command

Wall Street's attention along with results from companies

including drugmaker Eli Lilly ( LLY ) and semiconductor designer

Advanced Micro Devices ( AMD ).

The first quarterly report is also due on Tuesday for Elon

Musk's SpaceX, whose shares have stumbled after their

post-initial public offering surge last month and which could

have broader ramifications for investors' risk appetite.

"It's an overall market that is searching to regain its

footing and kind of feeling around for where that is going to

come from," said Yung-Yu Ma, chief investment strategist at PNC

Financial Services Group.

The S&P 500 is up over 8% in 2026. Investors have pointed to

fundamental support for stocks from strong overall corporate

profit growth, while a recent broadening of equity gains to

lagging sectors could indicate more durability for the nearly

4-year-old bull market.

But concerns that some areas of the AI trade have become

overheated have weighed on indexes, especially on high-flying

shares of semiconductor companies that have retreated in July. A

re-escalation in the U.S. war with Iran is also complicating the

picture, with a resurgence in oil prices driving up Treasury

yields on renewed inflation worries.

"The market has kind of been held hostage to the price of

oil and the yield on the 10-year (Treasury), both of which have

moved higher," said Art Hogan, chief market strategist at B.

Riley Wealth. "We'll see if we can get any relief on that front

next week."

PAYROLLS REPORT EYED AFTER FED FALLOUT

Wall Street was still grappling with the Fed's decision to

keep interest rates unchanged, as three of its 12 policymakers

dissented from the vote in favor of a hike.

Confusion centered on the press conference from new Fed

Chair Kevin Warsh, who was presiding over his second meeting.

Warsh repeated his firm intent to bring inflation down to 2%,

but investors expressed uncertainty about how he planned to

reach that longstanding target.

Data on Thursday showed the core Personal Consumption

Expenditures Price Index - an inflation gauge the Fed tracks -

rising 3.3% year on year in June.

Warsh's aim to reduce the Fed's guidance telegraphing its

rate plans could also bring new market scrutiny to economic

data, including the upcoming jobs report.

The new leadership at the Fed is "a meaningful change in

terms of mindset around forward guidance, transparency and

communication," said Jim Baird, chief investment officer with

Plante Moran Financial Advisors.

"What we'll likely see as a result is the potential for

maybe a little bit more volatility around key economic releases

... because there's just a little less clarity around where

we're heading."

BIG EARNINGS WEEK INCLUDES PALANTIR, CATERPILLAR ( CAT )

The nonfarm payrolls report for July is expected to show an

increase of 91,000 jobs, and an unemployment rate of 4.3%,

according to a Reuters poll.

Given the Fed's focus on inflation, a significantly higher

job growth number could raise concerns about an overheated

economy and firm up bets on rate hikes. Fed funds futures as of

Thursday were indicating a 64% chance of a rate increase at the

Fed's next meeting in September, according to LSEG data.

"If there was an unexpected heating up of labor conditions,

that would contribute almost unambiguously to a Fed more likely

to raise at the next meeting," Baird said.

More than one-quarter of the S&P 500 is due to post results

next week. Reports include Caterpillar ( CAT ), Palantir ( PLTR )

and Merck ( MRK ).

Second-quarter profits overall are tracking for a big jump.

Including companies that have reported along with estimates for

the rest, S&P 500 earnings are on pace to rise 27.7% on an

adjusted basis from a year ago, according to LSEG IBES data as

of Wednesday.

"The earnings picture overall should provide stability,"

PNC's Ma said.