U.S. stocks ended the week on a strong note Friday, with both the S&P 500 and Nasdaq closing at fresh record highs after the Federal Reserve indicated it still expects two interest-rate cuts this year.

The market reaction reflected growing investor optimism that borrowing costs could ease later in the year, even as recent economic data has remained mixed. Lower rates typically support valuations by making it cheaper for businesses and consumers to borrow.

While the Fed’s outlook was enough to lift sentiment, traders are still watching inflation trends, labor-market data and the central bank’s next move. Those factors will determine whether the rally has room to extend or whether expectations for cuts will need to be revised.

For now, the latest session reinforced a familiar Wall Street theme: hopes of cheaper money can be enough to push major indexes to new highs, even when the broader economic picture remains uncertain.