Stock market today: Stocks secure best week of the year, reversing early August sell-off

Stocks ended the day in the green on Friday after a rally on Thursday saw the benchmark S&P 500 ( ^GSPC ) and tech-heavy Nasdaq Composite ( ^IXIC ) erase losses suffered during this month's sell-off.

These gains helped secure the best week of the year for all of the major indexes and the best week for stocks since November.

After rallying more than 2% on Thursday, the Nasdaq closed up about 0.2% on Friday. The S&P 500 and Dow Jones Industrial Average ( ^DJI ) also each secured gains of about 0.2%.

A quiet calendar greeted investors on Friday, with the main data release showing consumer sentiment ticked higher in August, rebounding for the first time in five months.

Thursday's gains were catalyzed by two key readings on the US consumer — monthly retail sales and Walmart's ( WMT ) latest earnings report — which showed any recessionary fears triggered by the sharp drop in stocks at the beginning of the month are likely misplaced.

"We've seen consistency with the consumer," Walmart's CFO told Yahoo Finance . "If you look at each month of the second quarter, they were all fairly consistent. There was no step-down in July, as some had expected. And that's generally our outlook for the year."

Following the positive data, investors have also now pared back some of their more dramatic bets on rate cuts from the Federal Reserve this year.

Data from the CME Group now shows investors placing 66% odds on the Fed cutting rates by 0.25% next month; odds of a 0.50% rate cut now stand at 33%. During the market's most turbulent moments last week, there was almost a near-certainty that a 0.50% cut would be warranted.

The next key update from investors on the rates front will come next Friday when Fed Chair Jay Powell is set to speak before the annual Jackson Hole Symposium.