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Here’s why the GDP report could have a ‘massive effect’ on markets

The Bureau of Economic Analysis is set to release its second-quarter gross domestic product report on Friday morning, and Wall Street experts have increasingly high expectations for the report.

Strategists and economists are looking for a pickup from the first quarter's weak reading, which reflected the economy's slowest growth in three years.

The market is looking particularly for a pickup in consumer spending after the first-quarter data reflected disappointing growth on that front, said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management.

"The results will be vital to the Fed policy going forward, as the whole normalization process depends on the idea of U.S. recovery, assuming its normal historical projection of 2-3% growth," Schlossberg wrote to CNBC in an email Thursday.

"If consumer spending is decidedly weaker than market forecasts, the Fed will have a very difficult time convincing the market that any rate hike is possible in December," he wrote.

Schlossberg added that since markets are so eagle-eyed on the Fed's policy plans, such an outcome could have a "massive impact" on the U.S. dollar, bonds and equities on Friday.

Ahead of the Friday release, Barclays revised upward its GDP estimate to 2.7 percent growth from a previous estimate of 2.4 percent. This is in line with broader estimates; the first quarter showed 1.4 percent growth. Barclays' revision was due in part to strong durable goods orders data, inventory and trade data.

"We expect solid growth in private consumption (3.0%) and modest increases in business spending to provide most of the impetus to growth. Inventory and trade data should be largely offsetting, and government spending should not contribute much in the way of growth," Barclays chief U.S. economist Michael Gapen wrote.

Also on Thursday, Goldman Sachs raised its second-quarter forecast to 2.2 percent growth, revised up from 1.9 percent. The investment bank's forecast for the third quarter is 2.5 percent growth.

The CNBC/Moody's Analytics Rapid Update tracker showed a median forecast of 2.9 percent for the second quarter. This figure is still well below the 3.8 percent initially forecast by the economists who participated in the survey.

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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