It’s been quite a turnaround.

All three major U.S. stock indexes edged higher Friday to notch their biggest weekly gains of the year, with traders regaining their confidence after last week’s market freakout.

Investors got a plenty of reassurance on the U.S. economy in recent days: softer-than-expected inflation data, a surprisingly strong retail-sales report and a drop in unemployment claims. Backing up investor expectations, two Federal Reserve officials signaled Thursday they could support a September interest-rate cut.

One sour note: housing starts slid in July to a four-year low, data out Friday showed.

Read the day’s full markets roundup here.

As of late Friday:

Stock indexes finished higher. The S&P 500, the Dow and the Nasdaq Composite all rebounded after opening the session lower, with each ending the day up 0.2%. For the year, the S&P 500 is up 16%.

Treasury yields edged lower. The 10-year yield settled at 3.891% Friday.

Global stock markets largely rose. Hong Kong’s Hang Seng Index gained 1.9%, and Japan’s Nikkei 225 added 3.6%.

Mainland Chinese indexes were less buoyant. Data this week showed China’s economy is still in the doldrums.

—By Angus Berwick and Sam Goldfarb