World stock markets and oil prices rallied on Friday, fueled by hopes for global growth after China rolled out a surprise interest rate cut and the European Central Bank indicated it would step up asset purchases to boost the euro zone economy.

The jump in oil prices took beaten-down Brent back above $80 a barrel. U.S. interest rates eased as the dollar gained, and the euro declined.

Wall Street's Dow Jones industrial average and the S&P 500ended at new record highs, with each rising more than 1 percent on the week in the fifth straight week of gains for U.S. equities.  

"This is a one-two punch for global growth," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The Dow Jones .DJI rose 91.06 points, or 0.5 percent, to close at 17,810.06 on Friday. The S&P 500 .SPXgained 0.52 percent to 2,063.50 and the Nasdaq Composite .IXIC added 0.24 percent to 4,712.97. The Nasdaq rose 0.5 percent for the week.

European shares .FTEU3, oil LCOc1 and other growth-sensitive commodities all leapt on China's move to cut rates to 5.6 percent, following recent data that showed its huge economy was heading for its worst year in almost a quarter of a century.

China's rate reductions were its first in more than two years. They came as ECB head Mario Draghi spoke of his determination to use more aggressive measures, such as large scale asset purchases, to ensure the euro zone does not slump into a new crisis.

Both the euro zone and China have lagged the momentum of the United States, stimulus-driven Japan and faster-growing Britain over the last month, but a ramping up of the ECB's rhetoric and Beijing's actions will stoke hopes of a turnaround.

Germany's DAX .GDAXI and France's CAC .FCHI rose nearly 3 percent. The FTSE Eurofirst 300 added 2.1 percent.

The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 nations, was up 0.76 percent.

The dollar index .DXY was up 0.82 percent, as the euro gave up more than 1 percent and was last at $1.2385.

The yen was up against the dollar. Japanese Finance Minister Taro Aso said on Friday the yen's fall over the past week was "too rapid." It was one of the strongest warnings against a weak yen since the aggressive stimulus efforts began two years ago, and saw the currency leap off a 7-year low to 117.72.

Benchmark 10-year U.S. Treasury notes US10YT=RR were up 6/32 in price to yield 2.31 percent from 2.34 percent late Thursday.

The rate cut by China added to a positive mood among oil traders, many of whom expect the Organization of the Petroleum Exporting Countries to trim production at what looks to be a landmark meeting in Vienna on Nov. 27. Brent traded above $80 a barrel and was last up $1 to $80.35.

Copper CMCU3 and gold XAU= also got a lift, with the red metal up 0.50 percent. Spot gold climbed back over $1,200 and was last traded at $1,200.80 an ounce, ahead nearly $7, as traders cheered the prospect of more global stimuli.