The IBEX 35 took profits on Thursday after gaining more than 1% on Thursday and accumulating a four-session upward streak, but remained at its highest level in almost eight years, as bets on interest rate cuts in the United States increased.

Optimism about the outlook for the cost of money was encouraged by a US consumer price data that showed a less-than-expected rise in April (0.3% month-on-month versus 0.4% expected), resuming the downward path after inflation accelerated in previous months.

Expectations of cooling demand and prices were reinforced by other data released on Wednesday, such as retail sales, which, against all odds, showed no change last month, as inflation-worried consumers cut back on spending at online stores and auto dealers.

Still, the euphoria was tempered by the long road ahead for the Fed before bringing prices, currently showing a 3.4% year-over-year increase, back to the Fed's 2% target.

"It will be necessary for price growth to moderate to at least monthly rates of +0.2% to gradually approach the Fed's 2% inflation target, as well as to see a clear downward trend in core services inflation (still at elevated levels, 5.3%) and excluding housing (rebounding to 4.9%)," said Renta 4 analysts in a note to clients.

According to interest rate futures on LSEG's IRPR tool, markets currently expect a total of 50 basis points of rate cuts this year, which is just under two 0.25 basis point cuts. On Wednesday, prior to the release of the U.S. CPI, futures were showing a 44 basis point probability for the full year.

These same futures point to the most likely start of rate cuts occurring at the Fed's September 18 meeting, with a 70% probability.

More news on the health of the U.S. economy will come later in the day, with housing sector indicators, import prices and weekly unemployment data due at 1230 GMT and industrial production data at 1315 GMT.

Against this backdrop, at 0715 GMT on Thursday, Spain's selective IBEX 35 stock market index was down 4.60 points, or 0.04%, to 11,358.20 points, its highest level since July 24, 2015, while the FTSE Eurofirst 300 index of large European stocks advanced 0.06%.

If it closes higher, this would be the fifth consecutive positive day for the Spanish index.

In the banking sector, Santander rose 0.38%, BBVA fell 0.44%, Caixabank advanced 0.33%, Sabadell fell 0.55%, Bankinter dropped 0.08% and Unicaja Banco rose 0.46%.

Among the large non-financial stocks, Telefónica gained 0.02%, Inditex was flat, Iberdrola rose 0.01%, Cellnex fell 0.32%, and the oil company Repsol lost 0.48%.

(Information by Tomás Cobos; edited by Benjamín Mejías Valencia)