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The high-growth stocks that play such a prominent part in Nasdaq Composite (NASDAQINDEX:^IXIC) have been on fire lately. Despite a pullback in the past week, the Nasdaq remains near its record highs, and the index is poised to claw back some of its lost ground Monday morning as futures are up about half a percent.

Nevertheless, the stock market does face some challenges, and one of the biggest ones could have an outsize impact on the Nasdaq in particular. This week, investors will find out about the latest readings on inflation at the consumer level. Based on what the numbers say, investors could find that their favorite Nasdaq stocks react violently if there’s a surprise on the price front.

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The return of inflation

The Bureau of Labor Statistics releases its August report on the Consumer Price Index on Tuesday morning. Economists expect that the index of goods and services that consumers buy will rise 0.4% for the month.

On one hand, that’s good news, as it would be down from the 0.5% figure in July and the 0.9% rise in August. However, it would still mark a year-over-year inflation rate well above 5% — the highest that it’s been in more than a decade.

A number of factors are affecting prices. One big impact is coming from supply chain disruptions, as manufacturing capacity across the world and the ability to transport manufactured goods are all under pressure from the ongoing COVID-19 pandemic. That has shown up most clearly in the Nasdaq in the semiconductor industry, where chip makers are producing strong profits because semiconductors are in such high demand. That’s great for producers of those goods, although some of them are having trouble meeting their commitments to their customers. However, it’s bad news for the businesses and consumers that actually need those goods, and that’s showing up in higher prices.

Moreover, some industries took drastic steps during the pandemic that have now affected their ability to return to normal operation. A great example here is in the rental car industry, where companies reduced the sizes of their vehicle fleets substantially in order to produce much-needed cash. Now, travel demand has skyrocketed, and the combination of low supplies of cars and lots of people wanting them has sent car rental prices higher. That’s being felt in used car prices as well.

Does inflation really matter for the Nasdaq?

The argument for why this matters to high-growth stocks in the Nasdaq is that higher interest rates will prompt the Federal Reserve to raise interest rates. Higher rates will boost the discount rate for future profits, and since the smaller high-growth players in the Nasdaq could take years to realize their full potential, higher discount rates push valuation of those stocks lower by a disproportionate amount.

However, it’s far from certain that the actual business prospects of these companies will take a hit from inflation. Many software-as-a-service companies have had high net retention rates that indicate a high level of stickiness from clients, and it’s likely that users of these SaaS services could well be willing to pay higher prices to make sure they can keep them. Admittedly, competitive pressures in some areas could give some companies more pricing power than others, but overall, strong SaaS companies would likely prove largely inflation-resistant.

As a result, if inflation is surprisingly high on Tuesday, investors can expect the Nasdaq to fall. However, such a drop might well give long-term investors the buying opportunity they’ve been looking for.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.