S&P 500 caps off its best week of the year after strong economic data

• The S&P 500 clinched its best week of the year as investors cheered the latest economic data.
• Data released Friday showed consumer sentiment rose in August for the first time in five months.
• It capped off a run of encouraging data points, including cooler inflation and strong retail sales.

The S&P 500 closed its best week of 2024, rising by 3.9% over five days. The big sell-off earlier this month was erased by a flurry of strong data points boosting the case for a soft landing.

The S&P 500 and the Nasdaq edged 0.2% higher on Friday, while the Dow Jones Industrial Average rose by 97 points.

The 10-year yield fell by 3 basis points, to 3.89%, down 6 for the week as investors dialed back bets on steeper rate cuts from the Federal Reserve.

Kicking off the week were two fresh inflation readings indicating that pricing pressure is cooling in the US economy, with consumer inflation coming in below 3% for the first time in three years.

That was followed by a surprise 1% jump in retail sales and the lowest jobless-claims figures in five weeks. Finally, on Friday, the University of Michigan's consumer-sentiment survey for August suggested US consumers were feeling more upbeat about the economy and their finances for the first time in five months.

Here's where US indexes stood at the 4 p.m. closing bell on Friday:

• S&P 500 : 5,554.25, up 0.2%
• Dow Jones Industrial Average : 40,659.76, up 0.2% (97 points)
• Nasdaq composite : 17,631.72, up 0.21%

Goldman Sachs analysts said in a note following the week's data updates that investors shouldn't lose faith in the face of intense volatility like this month's. They say a soft landing is firmly in the cards for the US economy.

"From a market standpoint, we again think it makes sense to lean against extreme concerns and keep the faith in the modal view of continued expansion and decelerating inflation, rather than an imminent recession," the analysts wrote.

Next week, investors will tune into the economic symposium at Jackson Hole, Wyoming, for clues about what the Federal Reserve policy will bring in September. Markets are feeling certain that the central bank will deliver its first rate cut, though the odds of a jumbo 50-basis-point move have markedly declined after the week's data.

Here's what else is happening:

• New housing starts hit a COVID-era low as high prices scared away buyers.
• Russia has expanded its fleet of shadow tankers used to evade oil sanctions, a think tank said.
• Here's why gold prices just hit a record .

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil fell by 1.8%, to $76.72 a barrel. Brent crude , the international benchmark, declined by 1.5%, to $79.78 a barrel.
• Gold traded higher, at $2,463.30.
• The 10-year Treasury yield dipped by 3 basis points, to 3.88%.
• Bitcoin rose by 3.75%, to $59,710.