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By Kanchana Chakravarty and Nikhil Sharma

June 27 (Reuters) - The S&P 500 and the Nasdaq were on track to touch record highs on Friday as a benign inflation report supported hopes for a dovish policy outlook from the Federal Reserve this year.

A Commerce Department report showed the Personal Consumption Expenditure price index rose 0.1% in May, in line with estimates by economists polled by Reuters. In the 12 months through May, PCE inflation advanced 2.3% after climbing 2.1% in April.

The data also showed U.S. consumer spending unexpectedly fell in May as the boost from consumers preemptively buying goods such as motor vehicles ahead of tariffs faded.

"The numbers in general in terms of inflation are not anything that would change the course of the Fed at this time, and it still shows that inflation pretty much is going in the right direction," said Peter Cardillo, chief market economist at Spartan Capital Securities.

As the ceasefire in the Middle East holds, investor focus has turned to the prospect of a dovish Fed after the Wall Street Journal reported that U.S. President Donald Trump toyed with the idea of announcing Fed Chair Jerome Powell's replacement by September or October.

A spate of economic data this week, including a weaker-than-expected first-quarter GDP reading as well as jobless claims reaching multi-year highs, has supported the case for the central bank to cut borrowing costs this year.

Traders now price in a 20.7% chance of a rate cut in July, compared with 14.5% last week, according to CME Group's FedWatch tool.

U.S. Treasury Secretary Scott Bessent said the Trump administration's various trade deals with other countries could be done by the September 1 Labor Day holiday, citing the country's 18 main trading partners.

At 08:43 a.m. ET, Dow E-minis YMcv1 were up 125 points, or 0.29%, S&P 500 E-minis EScv1 were up 15 points, or 0.24%, and Nasdaq 100 E-minis NQcv1 were up 64.75 points, or 0.29%.

Nike's NKE.N shares rose 10.7% in premarket trading after it forecast a smaller-than-expected drop in first-quarter revenue.

Retailer Lululemon Athletica LULU.O rose 1.7% after Nike's results, while Hoka-owner Deckers Outdoor DECK.N added 1.9%.

American nuclear energy firms gained after Reuters reported the Trump administration was readying a package of executive actions aimed at boosting energy supply to power the U.S. AI expansion. Oklo's OKLO.N shares advanced 7.3% and Constellation Energy CEG.O rose 2.7%.

On the flip side, gold stocks slipped as bullion neared a one-month low. Top miners such as Newmont NEM.N and U.S.-listed Barrick Mining B.N were down 2.2% and 2.1%, respectively.

The benchmark S&P 500 .SPX and the Nasdaq .IXIC are on track for their best weekly performance in more than a month, while the blue-chip Dow .DJI is set for a weekly advance if gains hold.

UBS Global Wealth Management raised its year-end target for the S&P 500 index .SPX to 6,200 from its prior forecast of 6,000, banking on softening trade uncertainty.

Adding to the upbeat sentiment, Washington reached an agreement with China on expediting rare-earth shipments to the United States, a White House official said, days ahead of the July 9 deadline for Trump's "reciprocal" tariffs.

Also on tap is the final reading of consumer sentiment for June, measured by the University of Michigan Surveys of Consumers, due at 10:00 a.m. ET.

Remarks from Cleveland Fed President Beth Hammack and Fed Board Governor Lisa Cook are expected later in the day.

(Reporting by Kanchana Chakravarty and Nikhil Sharma in Bengaluru; Additional reporting by Stephen Culp; Editing by Pooja Desai)

((Kanchana.Chakravarty@thomsonreuters.com;))