Equities pushed firmly higher in early trading on Thursday after the Federal Reserve took a dovish turn to signal a possible rate cut this year and as oil prices jumped amid growing tensions in the Persian Gulf.

All three benchmarks were firmly higher, with the Standard & Poor’s 500 in record high territory, with the Dow Jones Industrial Average and Nasdaq Composite nearing their peaks. The markets surged after interpreting Wednesday’s Federal Open Market Committee as taking a dovish turn, meaning interest-rate cuts are expected to come this year.

“The US monetary authorities have opened the door to an imminent decrease in key rates at their June 19 meeting,” said economists from Desjardins, a Montreal-based bank. “We are now counting on two key rate cuts of 0.25% each in the United States, with one in July and one in September.”

Lower interest rates can benefit stocks by keeping costs down for business and consumers, as well as supporting growth in a time of economic uncertainty. Weakness in banks kept financial stocks in check, and the measure was up just 0.2% on the S&P 500 in early trading.

The strongest gain in the group came from energy, rising 1.9% as prices for crude oil surged. West Texas Intermediate jumped 4.2% to $56.02 a barrel while Brent gained 3.3% to $63.88 a barrel after US Central Command said in a statement that a US drone was shot down by an Iranian surface-to-air missile system, and said the country’s claims that the drone was over Iran are “false.”

ConocoPhillips (COP) rose 2.4%, BP (BP) gained 2.2% and blue-chip Exxon Mobil (XOM) was up 1.8% in one of the best gains on the Dow. Nike (NKE) climbed 2.1% in the measure’s strongest advance while Cisco Systems (CSCO) firmed 2%.

In company news, Oracle (ORCL) surged 8% after reporting better-than-expected fiscal fourth-quarter results. Kroger (KR) shed 2.5% after posting year-on-year losses in its results, and same-store sales that missed Street projections.

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