The $S&P 500 Index (.SPX.US)$ has wrapped up its most lucrative week of 2024 on Friday, soaring 3.9% in five trading days.

What Happened: The substantial rally effectively neutralized the major sell-off that occurred earlier this month, propelled by a series of promising data that hint at a gentle deceleration for the economy.

On the final trading day of the week, both the S&P 500 and the Nasdaq saw a 0.2% rise, while the $Dow Jones Industrial Average (.DJI.US)$ ascended by 97 points.

According to the report by Business Insider, the 10-year yield descended by 3 basis points to 3.89%, marking a weekly decrease of 6 as investors tempered their expectations of more drastic rate cuts from the Federal Reserve.

The week kicked off with two fresh inflation readings, showing a slowdown in pricing pressure in the US economy. Consumer inflation dipped below 3% for the first time in a three-year span.

This was succeeded by an unexpected 1% surge in retail sales and the lowest jobless-claims figures in a five-week period.

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Analysts at Goldman Sachs expressed a positive outlook in a note, urging investors to keep their confidence intact despite the month's severe volatility. They forecast a gentle deceleration for the US economy, underscoring continued growth and slowing inflation over a looming recession.

"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 mentioned in a report.

Why It Matters: The strong performance of the S&P 500 this week, backed by positive economic indicators, is a significant development.

The cooling of inflation, rise in retail sales, and decrease in jobless claims all point towards a stable economy. These factors, coupled with the optimism expressed by Goldman Sachs, have helped to alleviate investor concerns about a potential recession.

Investors are now eagerly awaiting the economic symposium at Jackson Hole, Wyoming, next week, which is expected to provide further insights into the Federal Reserve's policy direction in September.

This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.