NEW YORK/LONDON, Feb 9 (Reuters) -

Global equities rose with the S&P 500 crossing the 5,000-point milestone on Friday, as U.S. inflation data raised expectations the Federal Reserve will cut interest rates this year, while closely watched U.S. Treasury yields rose.

The greenback reversed earlier gains, but was still headed for a fourth weekly rise.

Oil headed for a weekly gain on worries over a broadening conflict in the Middle East after Israel rejected a ceasefire offer from Hamas.

The MSCI All Country stock index was up 0.35% by 2:11 p.m. EST (1911 GMT).

The mood in stock markets was buoyed by Wall Street, where the S&P 500 index rose above 5,000 points for the first time ever, helped by big gains in megacap stocks such as Nvidia .

The chipmaker climbed to a record high after

Reuters reported

it was building a new business unit.

"A close above this closely watched level will undoubtedly create headlines and further feed fear of missing out (FOMO) emotions," said Adam Turnquist, chief technical strategist for LPL Financial in Charlotte, North Carolina.

"Outside of a potential sentiment boost, round numbers such as 5,000 often provide a psychological area of support or resistance for the market. Researchers often refer to them as ‘cognitive shortcuts’ that create a round-number bias."

U.S. monthly consumer prices rose less than initially estimated in December, but underlying inflation remained a bit warm, data showed on Friday. The data revision did little to alter expectations for central bank rate changes.

U.S. inflation data for January is also coming next week.

The Dow Jones Industrial Average fell 58.99 points, or 0.15%, to 38,667.34; the S&P 500 gained 23.78 points, or 0.48% to 5,021.69; and the Nasdaq Composite gained 184.15 points, or 1.17%, to 15,977.87.

The yield on benchmark U.S. 10-year notes rose 1.1 basis points to 4.181%, from 4.17% late on Thursday.

The two-year note yield, which typically moves in step with interest rate expectations, rose 2.8 basis points to 4.4841%, from 4.456% late on Thursday.

Gold prices were under pressure from stronger Treasury yields, with spot gold down 0.41% at $2,024.75 an ounce. U.S. gold futures settled 0.4% lower at $2038.7.

U.S. crude gained 0.6% to $76.68 a barrel and Brent rose to $82 per barrel on the day.

European shares ended slightly lower under pressure from rising yields and sliding L'Oreal shares.

The pan-European STOXX 600 index closed 0.1% lower, but still eked out a weekly advance of 0.2%.

L'Oreal dropped 7.6% after the French cosmetics company reported underwhelming fourth-quarter sales growth.

Inflation in Germany, Europe's biggest economy, eased in January to 3.1%, adding fuel to bets on when the European Central Bank will begin easing rates.

However, euro zone bond yields hit multi-week highs after several ECB rate setters warned against easing monetary policy too early.

"Indeed, it seems pretty clear now that the ECB will be waiting for European wage data statistics at the end of April before likely cutting rates in June," ING bank said in a note to clients.

Japanese shares hit 34-year highs. The yen recovered after falling to a 10-week low, with traders reassessing their bets on how quickly the Bank of Japan might raise rates.

In China, mainland markets were closed and Hong Kong traded thinly and shut early, with the Hang Seng down 0.8% amid worries that authorities may not deliver on promises for support.

"I am betting that (decisive action) is happening," said Chi Lo, senior markets strategist for Asia Pacific at BNP Paribas Asset Management.

(Reporting by Huw Jones; Additional reporting by Tom Westbrook; Editing by Kirsten Donovan and Jonathan Oatis)