US stocks hit records on Friday after an update on inflation came in a bit less painful than feared.

The S&P 500 rose 0.8 per cent and topped its prior all-time high, which was set earlier this month. The Dow Jones Industrial Average rallied 472 points, or 1 per cent, and the Nasdaq composite climbed 1.1 per cent. Both also set records.

The Australian sharemarket is set to advance, with futures pointing to a rise of 26 points, or 0.3 per cent, at the open. The Australian dollar was fetching US65.40¢ at 5.20am AEDT.

The data on inflation is encouraging because it could mean less pain for lower- and middle-income households struggling with still-high increases in prices every month. Even more importantly for Wall Street, it could also clear the way for the Federal Reserve to keep cutting

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