Fears of a stock market crash are swirling ahead of the release of the May personal consumption expenditures (PCE) inflation report, due June 28. The Federal Reserve’s favorite price gauge should confirm whether the promising consumer price index (CPI) report was the start of a disinflationary trend or a mere flash in the pan.

So, what should you expect?

Well, according to the Cleveland Fed’s Nowcasting tool, the PCE is expected to increase by 0.07% in May. This is slightly more than the CPI’s flat reading for the month but still reflects a notable slowdown in inflation.

The core PCE, which excludes the volatile food and energy categories, is expected to increase by 0.10%, less than the core CPI’s 0.2% uptick. If accurate, this should prove a major win for members of the Fed, who have been eagerly awaiting for core prices to fall as they look to cut interest rates later this year.

“The inflation data received earlier this year were higher than expected, though more recent monthly readings have eased somewhat,” Fed Chair Powell said at the June policy meeting. “We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent. So far this year, the data have not given us that greater confidence.”

Will the PCE Report Cause a Stock Market Crash?

Hopes are high for the May PCE report. Indeed, with the CPI coming out as promising as it did, investors will be satisfied only with a PCE that echoes a similar sentiment.

While stocks have performed well this year, nigh, regardless of inflation concerns, expect stocks to show at least some response to the PCE. Should the PCE come in cool, stocks will likely climb on higher anticipated chances of an interest rate cut on the way, and vice versa.

So far this year, inflation hasn’t made the progress the Fed has been looking for. This month’s data may stand to change that, however.

“The most recent inflation readings have been more favorable than earlier in the year, however, and there has been modest further progress toward our inflation objective,” Powell said.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.