U.S. stock futures rose on Thursday, with all three major indexes poised to open at record highs amid optimism that inflation is cooling enough to see the Federal Reserve cut interest rates in the coming months.

Futures for the Dow Jones Industrial Average advanced 35 points, or 0.1%, after the index rallied 349 points on Wednesday to finish at 39,908. S&P 500 futures were also 0.1% higher, as were contracts tracking the tech-heavy Nasdaq. The yield on the benchmark 10-year U.S. Treasury note hovered at 4.33%.

The Dow, S&P, and Nasdaq all closed at records on Wednesday after the release of U.S. inflation data, which added weight to expectations that the Fed will cut rates from their current, generational peak by September in what should be a tailwind for stocks.

The outlook for inflation and rates remains the dominant narrative in markets, with investors seizing on signs that price growth—which since 2022 has hit multi-decade highs—is normalizing towards the Fed’s 2% annual target.

“The overall mood remains bright,” said Sophie Lund-Yates, an analyst at broker Hargreaves Lansdown. “While the path to disinflation was never going to be without bumps, this latest indicator suggests things are moving in favor of Federal Reserve interest rate cuts this year—albeit this can change at short notice.”

Worries that inflation was more persistent than expected had pressured stocks in the first quarter as traders pushed back expectations for when the first Fed rate cut—once seen as early as this past March—might come. But the Wednesday release of the consumer-price index (CPI) for April showed that inflation rose 3.4% year over year last month, down from a 3.5% increase in March.

It’s a return to an encouraging trend that has investors celebrating, though analysts caution that more evidence of cooling inflation is necessary, especially after Fed Chair Jerome Powell reiterated the central bank is in wait-and-see mode.