Wall Street set new record highs on Friday following inflation figures in line with expectations, with the market keen to believe that this will prompt the Federal Reserve to cut rates soon.

In late morning trading, the Dow Jones index gained 0.7% to 39.429.1 points, while the broader S&P 500 gained 0.6% to 5515.9 points, after setting a new all-time high of 5523.6 points.

The Nasdaq Composite advanced by 0.6% to 17,960.8 points, after briefly surpassing the 18,000-point mark and reaching a new all-time high of 18,035 points.035 points.

Over the first half of the year, which ends this evening, the Dow has gained 4.2%, the S&P close to 15% and the Nasdaq around 19%.

US equity markets are benefiting at the best of times - i.e. in the final session of the week, the month of June and the half-year - from a boost from the economy thanks to a good 'PCE' index.

The Commerce Department announced earlier this morning that this consumer price index, the Federal Reserve's preferred measure of inflation, had risen by just 0.1% in May.

Core PCE inflation, which excludes volatile items such as energy and food, also posted a very limited rise of 0.1%.

This is its lowest monthly variation in three and a half years.

This will allow the Fed to focus more on the labor market, and a little less on inflation", commented Bastien Drut, head of strategy and economic research at CPR AM.

These figures have reinforced the prospect of a first rate cut by the Fed in September, the probability of which is now assessed by investors at 61%, compared with over 59% the previous day.

On the bond market, the yield on ten-year Treasuries - which has been on a downward slope for the past two weeks - nevertheless continued its upward trend, climbing back above 4.30%.

The day's only disappointment, Nike plunged 19% as the world's leading sporting goods manufacturer reported disappointing sales for the past quarter and revised its targets upwards.

On the oil front, oil prices are consolidating slightly but are still heading for a third consecutive week of gains, with a barrel of Texas light crude (WTI) down less than 0.5% at $81.4.

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