US open: Stocks advance after Chinese rate cuts and Draghi's comments

US stocks rallied on Friday, as oil and metal prices rose after a surprise rate cut from China’s central bank.

Just before 10:00 in New York, the Dow Jones Industrial Average was 0.85% up, while the S&P 500 gained 0.23% and the Nasdaq rose 0.56%.

China’s central bank took the surprising decision to cut its one-year loan rate by 40 basis points and its one-year deposit rate by 25 basis points, adding it would allow more flexibility in deposit rates.

Over in Europe at a banking conference in Frankfurt, president of the European Central Bank (ECB) Mario Draghi said the bank will do what it “must to raise inflation and inflation expectations as fast as possible”.

“We will continue to meet our responsibility — we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us,” Draghi said.

The comments were taken as a sign the ECB will step-up asset buying.

"There is clearly a step up in rhetoric from Draghi in signalling the ECB’s willingness to take further monetary policy accommodation on the back of a 'challenging' disinflationary environment in the eurozone," said Gizem Kara, senior European economist at BNP Baripas.

"With the upcoming ECB staff growth and inflation projections likely to show significant downward revisions the central bank’s credibility in achieving its mandate of price stability will be challenged further.

"This should pave the way for additional easing, via a broadening of asset purchases, possibly as early as the December policy meeting."

In corporate news, Foot Locker advanced after the sports retailer‘s profit and sales beat estimates, while sector peer Hibbett Sports soared after raising its outlook.

Gap slid after announcing late on Thursday its results missed Wall Street forecasts and the clothing firm also delivered a disappointing full-year outlook, while Splunk jumped after results topped analysts forecasts.

Wynn Resorts advanced despite a Wall Street Journal report suggesting that the casino operator was being investigated by federal authorities over whether it broke money-laundering rules.

The dollar fell against the yen but rose against the pound and gained almost 1% against the euro, as the European currency showed signs of weakening after Draghi's comments.

Gold future rose to $1,202.90, while the prices of Brent crude and West Texas intermediate crude rose by about 1%, with the former trading at just under $80.50 a barrel and the latter trading at just over $76.50 a barrel.

The yield on the 10-year US Treasury note was stable at 2.33%, while the yield on the 30-year note lost two basis points to 3.04% and the yield on the five-year Treasuries was unchanged at 1.63%.