U.S. stocks ended the session with fresh milestones, as the S&P 500 and Nasdaq Composite both finished at record highs. The gains reflected rising investor confidence that the Federal Reserve may begin lowering interest rates later this year.

Markets have been closely tracking signs of easing inflation and a possible shift in the central bank’s policy stance. That outlook has helped drive demand for growth-oriented technology shares, which tend to benefit when borrowing costs fall.

The latest rally adds to a broader market advance that has been supported by expectations of a softer monetary environment. For investors, the focus now turns to upcoming economic data and comments from Fed officials that could confirm or challenge the rate-cut narrative.

While optimism remains strong, analysts caution that markets can quickly reverse if inflation proves sticky or the labor market stays too firm for policymakers to act soon. Even so, Thursday’s close underscored how powerfully rate-cut expectations are shaping Wall Street sentiment.