Wall Street rally gains steam, with the Dow surging about 700 points in its best day since late 2020

Stocks climbed Friday, building on Thursday’s rally, as investors continued to assess the financial risks stemming from Russia’s invasion of Ukraine.

The Dow Jones Industrial Average added about 715 points, or 2.2%. The blue-chip average is on track for its best day since late 2020. The S&P 500 gained 1.9%. The Nasdaq Composite rose 1.1%.

Stocks are coming off a whipsaw trading session Thursday in which the major indexes staged a massive comeback from steep declines earlier in the day. The Dow on Thursday erased a more than 800-point decline to close higher.

“Investors who have anticipated elevated volatility in 2022 swiftly came into the marketplace and you’re seeing follow-through today,” Jeff Kilburg, chief investment officer of Sanctuary Wealth, said. “We were in an oversold condition. There was an overreaction in the equity markets to the Ukraine crisis.”

For the week, the Dow is marginally lower while the S&P 500 and the Nasdaq Composite are positive.

Shares of Johnson & Johnson and 3M were the top gainers of the Dow on Friday, adding more than 5% each. Etsy shares led the S&P 500 on Friday, rising around 13% after the online marketplace’s quarterly results beat analyst estimates.

Shares of Beyond Meat tumbled more than 11% after a disappointing earnings report. Foot Locker shares plunged about 32% after the retailer said 2022 sales will fall as it expects to sell fewer Nike products.

Market sentiment got a boost Friday after the Kremlin reportedly said that Russian President Vladimir Putin is ready to send a delegation to Belarusian capital Minsk for negotiations with Ukraine.

Russia is closing in on the capital city of Kyiv, according to Ukrainian officials. The capital had been hit by “horrific Russian rocket strikes,” Ukrainian Foreign Minister Dmytro Kuleba said.

European Union leaders are discussing imposing sanctions on any European assets held by Putin and Foreign Minister Sergey Lavrov, two sources told CNBC’s Silvia Amaro. It is not clear whether Putin or Lavrov own any significant assets in the EU.

President Joe Biden on Thursday rolled out a wave of sanctions against Russia in a broad effort to isolate Moscow from the global economy.

“There’s chaos on the ground, but there’s clarity on sanctions, and I think that’s where the market is taking some comfort,” said Jeff Kleintop, chief global investment strategist at Charles Schwab.

On the data front, the core personal consumption expenditures price index, the Federal Reserve’s primary inflation gauge, rose 5.2% from a year ago, the Commerce Department reported Friday. Economists surveyed by Dow Jones expected a 5.1% print.

The Nasdaq Composite is still in correction, or down more than 10% from its record high. The Dow and S&P 500 are just outside of correction territory.

“It’s a headline-driven market, and as we get some resolution and see what happens with Russia and Ukraine, the focus will be back on the Fed again,” Bespoke Investment’s Paul Hickey told CNBC’s “TechCheck” on Friday.