Aug 15 (Reuters) - Investors will next week train their

sights on Jackson Hole, Wyoming, where Federal Reserve

policymakers gather for their annual policy symposium, in a

search for clues on the path of interest rate cuts that could

boost stocks to more record highs.

This year's gathering follows a week in which consumer and

wholesale price data appeared to send mixed signals about how

well the economy is weathering U.S. President Donald Trump's

sweeping import tariffs. Its climax will be on Friday, when Fed

Chair Jerome Powell is scheduled to speak following what will

have been a data-light week.

After last week's flurry of data demonstrated that consumers are

resilient and the jobs market is not dead, some investors still

fret Powell may use the gathering to pour cold water on

widespread expectations for interest rate cuts in the coming

weeks, which have pushed stock indexes to multiple records,

citing other figures suggesting that inflation remains a

problem.

"We may have a lot at stake; this is a potentially

significant event this year," said Steven Sosnick, market

strategist at IBKR. "What if, once again, people are going into

this expecting a dovish Powell and he comes out with all guns

blazing?"

The futures market still expects the Federal Open Market

Committee to cut rates by a quarter of a percentage point at

least twice more this year, including an initial cut at its

mid-September meeting.

Companies likely to benefit most from lower borrowing costs

have been among the big winners in recent Wall Street trading,

said Andrew Slimmon, head of Applied Equity Advisors at Morgan

Stanley Asset Management.

"It's all about homebuilders, cyclical stocks, industrials,

and materials companies," Slimmon said.

Shares of leading homebuilders such as PulteGroup ( PHM ),

Lennar ( LEN ), and D.R. Horton ( DHI ) are up between 4.2% and

8.8% in the last week, as of midday Friday, thanks largely to

the recent drop in mortgage lending rates.

Their gains trounced the 1% rally in the Standard & Poor's

500 index over the last week. The group has outpaced the

broader market more dramatically over the last month, with gains

of 15% to 22% compared to 3.3% for the S&P 500. But their future

gains hinge on mortgage rates continuing to fall, something that

a recent uptick in 10-year Treasury bond yields puts into

question.

Any hint by Powell that he is paying more heed to bearish

signals on inflation than to other, more benign indicators might

threaten those gains, Slimmon said.

"The more I have seen the homebuilders rally, the more it

tells me the market thinks the Fed is going to cut, which means

any suggestion at Jackson Hole that this is not going to happen

will make markets more vulnerable" to a selloff, he added.

To keep markets calm, Powell will have to walk a fine

line and underscore the Goldilocks conviction held by many

investors that the economy is neither overheating nor at risk of

tipping into a recession, said Ashwin Alankar, head of global

asset allocation at Janus Henderson.

"He can't scare the market by saying the Fed believes the

economy really needs a lot of stimulus," Alankar said.

SENTIMENT SHIFT?

Some market-watchers on Thursday said they already detected

a shift in sentiment. In a note to clients, Thierry Wizman,

global FX and rates strategist at Macquarie Group, said as

recently as Wednesday, "the talk on the street was of a 'mega'

rate cut" but that a dovish cut in September was "more grounded

in reality."

Other factors make Powell's comments even more important for

stocks this year, investors said. In addition to the market's

lofty levels and a recent slide in the Cboe Volatility Index to

its lowest level this year, a string of positive

second-quarter earnings results is drawing to a close, leaving

investors few signals to guide them during the late-summer

doldrums.

"The calendar is getting pretty quiet," said Jeff Blazek,

co-chief investment officer, multi-asset, at Neuberger Berman.

The biggest risk of all, however, may be the market's recent

euphoria, which has defied a litany of bad news and left April's

tariff-driven nosedive in the rear-view mirror.

"Going into this event, the more smug we feel ... the

greater the risk of a market-moving reaction," said Sosnick.