Federal Reserve will increase the interest rate to tighten up the supply of money (the interest rates in the 80"s were in the range of 12% and 15% due to high inflation). Higher interest rate directly hurts the bottom line of corporate earnings which, in turn, can suppress the stock price. On the other hand, higher interest rate can attract investors to pull their money from the stock market to invest in fixed income securities such as corporate bonds or government bonds which generate higher returns on investment while enjoying less risk as compared to the stock. Therefore, it is hard to imagine that high inflation can cause the stock price to go up.