Stocks slipped in early trading on Friday after a rally on Thursday saw the S&P 500 ( ^GSPC ) and Nasdaq ( ^IXIC ) erase losses suffered during this month's sell-off. These gains have the major indexes on track for their best week of the year.

After rallying more than 2% on Thursday, the Nasdaq Composite ( ^IXIC ) fell about 0.4% at the open. The S&P 500 ( ^GSPC ) slipped 0.2% while the Dow Jones Industrial Average ( ^DJI ) traded on both sides of the flat line.

On Friday, US investors will have a quiet calendar ahead of them, with the University of Michigan's latest reading on consumer sentiment set to be the main calendar-based event.

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."

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% 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.