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* Rivian gains as higher deliveries drive Q2 revenue beat

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* S&P 500 briefly recovers 50% of bear market loss

* Indexes up: Dow 0.56%, S&P 0.84%, Nasdaq 1.20%

Aug 12 (Reuters) - Wall Street's main indexes rose on Friday, setting the S&P 500 and the Nasdaq for a fourth straight week of gains on increasing evidence that inflation may have peaked.

The S&P 500 is up 16.8% from its mid-June low, with the latest boost coming from a slower-than-expected rise in consumer prices and a surprise drop in producer prices in July.

The benchmark index crossed a closely watched technical level of 4,231 points, indicating it has recovered 50% of its bear market loss. It was headed for fourth straight week of gains, its best performance since November 2021.

"We're seeing a market that is focusing on inflation peaking and so the rally is continuing, although volume is rather light," said Peter Cardillo, chief market economist at Spartan Capital Securities.

"Investors are becoming more optimistic in terms of the Fed not being as aggressive as the market previously had expected."

While policymakers remain firm about a further tightening in monetary policy until inflation pressures fully abate, traders see a 55.5% chance of the Fed raising rates by 50 basis points next month instead of a 75 basis points hike.

The Fed has raised its policy rate by 225 basis points since March as it battles to cool demand without sparking a sharp rise in layoffs.

Ten of the 11 major S&P 500 sectors advanced, with communication services and information technology stocks leading the gains.

High-growth and technology stocks such as Apple Inc and Alphabet rose more than 1% each as investors returned to riskier assets and Treasury yields dipped after a volatile week.

Growth stocks have underpeformed their value counterparts so far this year on worries that rising Treasury yields due to aggressive rate hikes will pressure their valuation.

Investors bought $7.1 billion in equities in the week to Wednesday, according to a Bank of America note, with U.S. growth stocks recording their largest weekly inflow since December last year.

"The major indices are trading near highs going back to May and June and those highs are now serving as near-term resistance," said Adam Sarhan, chief executive of 50 Park Investments.

Meanwhile, banks rose 0.5% and were on track to extend their rally for sixth straight week, with JPMorgan & Chase and Morgan Stanley advancing 0.7% each.

Data showed U.S. consumer sentiment ticked further up in August from a record low this summer and American households' near-term outlook for inflation eased again on easing gasoline prices.

At 11:44 a.m. ET, the Dow Jones Industrial Average was up 185.45 points, or 0.56%, at 33,522.12, the S&P 500 was up 35.45 points, or 0.84%, at 4,242.72, and the Nasdaq Composite was up 153.87 points, or 1.20%, at 12,933.79.

After a rough start to the year, better-than-expected second quarter earnings from corporate America have supported the upbeat sentiment for U.S. equities.

Of the 456 S&P 500 companies that have reported earnings so far, 77.6% have topped profit expectations, as per Refinitiv data.

Rivian Automotive Inc rose 1% as the electric-vehicle maker reported better-than-expected second quarter revenue.

GlobalFoundries Inc jumped 11.2% on being added to BofA Global Research's "U.S. 1 list."

Advancing issues outnumbered decliners by a 2.76-to-1 ratio on the NYSE and by a 2.37-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 29 new lows, while the Nasdaq recorded 47 new highs and 28 new lows.

(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur)