NEW YORK (Reuters) – World stock markets jumped on Thursday, with the U.S. benchmark S&P 500 hitting a record high, while the 10-year U.S. Treasury note yield dipped below 2% as investors digested a signal from the Federal Reserve of potential U.S. interest rate cuts as soon as its next meeting.

The dollar weakened after the Fed, the U.S. central bank, on Wednesday indicated a marked shift in sentiment even as it left its benchmark rate unchanged for now. Gold prices soared to near six-year highs.

“I do think that today’s move is due to yesterday’s Fed move,” said James Ragan, director of wealth management research at D.A. Davidson.

“The Fed was certainly more dovish than they were earlier in the year and it seems pretty likely that they are going to cut the rate at the July meeting.”

Oil prices surged, with an extra boost from news that Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington.

MSCI’s gauge of stocks across the globe gained 1.06%. The index hit its highest since May 1.

On Wall Street, the Dow Jones Industrial Average rose 249.17 points, or 0.94%, to 26,753.17, the S&P 500 gained 27.72 points, or 0.95%, to 2,954.18 and the Nasdaq Composite added 64.02 points, or 0.8%, to 8,051.34.

Shares of Slack Technologies Inc, the fast-growing workplace messaging and communication platform, surged 48.5% in their debut. Oracle shares rose 8.2% after the company forecast current-quarter profit above estimates.

The pan-European STOXX 600 index rose 0.36%, reaching its highest since early May.

Bank of England officials voted unanimously to hold interest rates despite some recent suggestions from policymakers that borrowing costs should go up. The BoE cut its economic growth forecast for Britain to zero in the second quarter.

The Bank of Japan also kept monetary policy steady but Governor Haruhiko Kuroda signaled readiness to ramp up stimulus as global risks cloud the economic outlook, joining U.S. and European central banks in dropping hints of additional easing.

Focus also is turning to next week’s G20 meeting for any developments between the United States and China regarding their trade war that has raised concerns about global growth.

“There have been two drivers of the market gains this month: The expectations for the Fed to get more dovish; and optimism over the potential for some type of trade progress with China,” Ragan said.

Government bond yields in the United States and Europe fell following the Fed’s decision, with the U.S. 10-year note yield dropping below 2% for the first time in 2-1/2 years.

Benchmark 10-year U.S. notes last rose 1/32 in price to yield 2.0249%, from 2.027% late on Wednesday, after falling to 1.974% earlier.

The dollar index, which measures the greenback against a basket of currencies, fell 0.45%, with the euro up 0.54% to $1.1285.

“Certainly the market has taken this as a dovish turn and as a reason to sell dollars,” said Lee Ferridge, head of macro strategy for North America for State Street Global Markets. “The theme of the day is going to stay with the dollar under pressure.”

Spot gold added 2.0% to $1,386.91 an ounce.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.

U.S. crude settled up 5.4% at $56.65 and Brent settled at $64.45, up 4.3%.