Stocks ended the day little changed on Friday, marking a reversal of the significant losses seen earlier in August. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closed with modest gains, securing the best week of the year for the major indexes. The Nasdaq Composite, which had rallied over 2% on Thursday, closed up about 0.2% on Friday. The S&P 500 and Dow Jones Industrial Average also each secured gains of about 0.2%.

The week’s positive performance was driven by a series of key data releases, including a rebound in consumer sentiment, which had been at its lowest level in five months. Retail sales and Walmart’s earnings report also showed a resilient consumer, alleviating recessionary fears. Additionally, the Federal Reserve’s stance on interest rates has become less dovish, with investors now placing 66% odds on a 0.25% rate cut next month and 33% odds on a 0.50% cut.

The week’s data dump, which included inflation figures and consumer spending data, indicated that the US economy is likely to avoid a sharp downturn and achieve a “soft landing,” where inflation falls to the Fed’s 2% goal without a recession. This outlook was further supported by Bank of America Securities’ analysis, which noted consistent data prints pointing to a healthy economy.

The next key event will be Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium, which could influence market expectations regarding future interest rate moves. Overall, the week’s data and market performance suggest a more stable economic environment, with investors now less certain about the need for deep rate cuts.