Dow futures soar 150 points after China's surprise rate cut

U.S. stocks were setting up for a sharply higher open on Friday, taking their lead from gains in European and Asian markets and the first rate cut by China's central bank in more than two years.

Read MoreChinasurprises with rate cut to spur growth

Around 8:30 a.m. ET, Dow futures were trading up with an implied open of more than 150 points, while S&P 500 futures were up with an implied open of about 18 points.

Major European national stock indices gained more than 2 percent after European Central Bank President Mario Draghi reiterated dovish statements in a speech at a European banking conference in Frankfurt on Friday. Later in the day, the ECB also announced that it has begun buying asset-backed securities.

The Euro fell 1 percent against the U.S. dollar to $1.241.

The People's Bank of China cut its benchmark interest rates Friday for the first time in more than two years on Friday to lower borrowing costs and lift a cooling economy back on track. The one-year benchmark lending rate has been trimmed by 40 basis points to 5.6 percent.

One-year benchmark deposit rates would be lowered by 25 basis points, the PBOC announced, adding that the reductions would be effective on November 22.

Read MoreStocks surge as China central bank cuts rates

Even before the Chinese move, U.S. markets were buoyed by strong economic data from Thursday. The Philadelphia Federal Reserve Index (a survey of general business conditions) came in at 40.8 for November, more than double the expected 18.3 and the highest since December 1993. In addition, existing home sales hit 5.26 million and leading indicators gained 0.9 percent, both beating expectations for October.

After Thursday's raft of economic data, the market could take something of a breather on Friday, with just the Kansas City Federal Reserve manufacturing index in the U.S.

Allegheny Technologies and PPG Industries were the greatest gainers in pre-market trade on the S&P 500.

Athletic retailer Foot Locker posted better-than-expected quarterly results ahead of the open. The retailer reported fiscal third-quarter earnings of 83 cents a share on sales of $1.73 billion, as same-store sales jumped 6.9 percent.

Sotheby's CEO William Ruprecht will step down "by mutual agreement" with the auction house's board, although he will remain in the job until a successor is found. The move comes a few months after activist investor Dan Loeb and others joined the Sotheby's board.

President Barack Obama is under renewed scrutiny after announcing Thursday night an executive action on immigration. Obama said he would temporarily defer deportation for almost 5 million undocumented workers if they submit to registration and a background check. Republican politicians decried the plans as unconstitutional and ill-advised.

Read MoreGOP reacts furiously to Obama immigration plan

Meanwhile, speculation is growing that the Organization of Petroleum Exporting Countries may cut oil production when it meets on Thursday next week. That talk has helped drive oil futures up from record lows and is likely to keep the market volatile on Friday and next week.