Friday's monthly jobs report, along with a slew of other economic data slated for release this week, is likely to drive the stock market even higher if it surprises to the upside.

That's because any evidence that the Federal Reserve is cutting interest rates amid an ideal backdrop of continuous economic growth, a solid labor market, and easing inflation would be a "hugely bullish" outcome for equities, Citi head of US equity trading strategy Stuart Kaiser said.

"Everything is about the growth side of the economy, and everything is about the consumer," Kaiser told Yahoo Finance. "Any data that suggests consumer spending is holding in and you're not seeing the weakness that people are worried that the Fed is worried about, I think that's all going to be positive for equity markets."

Along with labor market updates that include ADP's payroll data and the monthly job openings and labor turnover survey, new releases on Tuesday and Thursday from the Institute of Supply Chain Management on activity in the manufacturing and services sectors are also expected to catch investor attention. Economists predict that activity in the manufacturing sector in September remained in contraction while services activity was relatively flat from the month prior.

On Friday, the September jobs report is expected to show 130,000 nonfarm payroll jobs were added to the US economy with unemployment holding steady at 4.2%, according to data from Bloomberg. In August, the US economy added 142,000 jobs while the unemployment rate fell to 4.2%.

Bank of America Securities equity and quant strategist Ohsung Kwon wrote in a note to clients on Monday that both the jobs data and manufacturing data have already been on the weaker side for months now. This would mean that some weakness is likely expected and only sizable misses on expectations could "reignite recession fears."

"On the other hand, strong prints can further boost confidence in a soft landing," Kwon wrote.

Morgan Stanley chief investment officer Mike Wilson wrote in a note to clients on Sunday night that he sees labor market data mattering "more than anything else" over the next three to six months. Wilson wrote that for a cyclical rotation in the stock market to take place, where economically sensitive areas outperform, labor data likely needs to be better than currently expected.

"We think the unemployment rate probably needs to decline alongside above-consensus payroll gains, with no material downside revisions to the prior months," Wilson wrote.

At the crux of this stance from strategists is the market's need for proof that the Federal Reserve isn't cutting interest rates because it's worried about the trajectory of the US economy.

When the Fed opted for a larger interest rate cut on Sept. 18, investors accepted that the Fed was cutting the benchmark rate by half a percentage point to preserve a currently healthy economy rather than to provide aid to a flailing one.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

Stocks subsequently rushed to new record highs. More evidence that the Fed is cutting rates amid this ideal backdrop would be a bullish outcome for equities, per Citi's Kaiser. But the data this week still poses a large risk to that narrative.

"If it turns out that they started cutting because they're legitimately concerned about weakness in the labor market, rate cuts aren't going to be enough to help equities in that case, and you're going to trade lower," Kaiser said. "So the why [the Fed is cutting] matters here. And payrolls is going to help answer that."

Federal Reserve Board Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee in Washington, on Sept. 18, 2024. (REUTERS/Tom Brenner/File Photo) (Reuters / Reuters)

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.