WASHINGTON – Global stock markets staged an explosive rally Thursday, embracing a move by the Federal Reserve to try to rejuvenate the U.S. economy by buying $600 billion in Treasury bonds.

The Dow Jones industrial average reached its highest point in more than two years, and stocks surged from Tokyo to London.

Elsewhere around the world, economic dominoes began to fall: The dollar sank. Oil prices surged. And Asian countries raised fears that their currencies would rise relative to the dollar, making their exports more expensive.

And some fretted about the prospect of financial instability in Asia and other regions. But stock investors, at least, celebrated the Fed’s move.

Fed Chairman Ben Bernanke said the bond purchases would drive down interest rates on mortgages and other borrowing. That could get individuals and businesses to borrow and spend and aid a U.S. economy stuck with 9.6 percent unemployment.

Two developments, in particular, seemed to cheer investors: In announcing its $600 billion bond-buying program, the Fed left the door open to further action later. And in an opinion piece published Thursday, Bernanke envisioned higher stock prices as part of “a virtuous circle.” He defined it this way:

Lower interest rates on loans will encourage companies to borrow and expand. Cheaper mortgages will let more people buy or refinance. Higher stock prices will boost the wealth and confidence of both individuals and businesses. Spending will rise, lifting incomes, profits and economic growth.

“A light bulb has gone on” in investors’ heads, said Brian Bethune, chief U.S. financial economist at IHS Global Insight. “They’re thinking: ‘Maybe this will work.”‘

The response to the bond-purchase program, dubbed “QE2” because it’s the second round of what’s called “quantitative easing,” was powerful. It cut across all corners of global financial markets:

Stocks jumped 2 percent in London, 1.9 percent in Paris, 1.6 percent in Hong Kong, 2.2 percent in Tokyo.

The Dow Jones industrial average hit its highest level since August 2008, rising nearly 220 points to 11,434.

Lower interest rates could spur economic growth and also make stocks more attractive compared with Treasury bonds with puny yields.

The dollar sank to a nine-month low against the euro and fell against the British pound.