Wall Street cheers possible Greek deal, China recovery

U.S. stock index futures pointed to a sharply higher open on Friday as markets cheered the latest developments in the Greek saga, after the government finally submitted a bailout proposal to creditors on Thursday.

Dow futures rallied around 130 points in pre-market trading, after Greek Prime minister Alexis Tsipras delivered a reform plan, which international creditors will review by Sunday—the "final" deadline for a deal being struck. No deal by then would increase the chances of Greece leaving the euro zone in a so-called Grexit.

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Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

European stocks surged on Friday following Greece's submission of proposals. Germany's DAX was up around 2.2 percent, while the French CAC rallied 3.1 percent.

Apart from Greece, Federal Reserve Chair Janet Yellen will also speak on the economic outlook and take questions on Friday at 12:30 p.m. ET in Cleveland.

Traders will listen for any guidance on whether international risks are serious enough to deter the central bank from raising rates this year – the Fed, in the minutes from its June meeting, noted that it was watching events in Greece and was concerned about China's economy.

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Asian stock markets also ended Friday on a positive note, as the market rebound in China entered a second day and on the back of rising hopes for a deal between Greece and its creditors.

Back in the U.S., wholesale trade figures are due at 10:00 a.m. ET. There are no major earnings due on Friday