Dow rallies more than 270 points Friday as stocks post their best week since 2020
Stocks climbed on Friday as the major averages notched their best week in more than a year.

The Dow Jones Industrial Average rose 274.17 points, or 0.8%, for the fifth day in a row to 34,754.93. The S&P 500 gained 1.1% to reach 4,463.12, and the Nasdaq Composite added 2.05%, ending at 13,893.84. Both indexes surged for a fourth consecutive day. All of the major averages finished their best week since November 2020.

Stocks are coming off a massive surge that resulted in the S&P 500 notching a 6.1% gain for the week. The Dow ended the week 5.5% higher, and the tech-heavy Nasdaq Composite advanced 8.1%.

Investors continued to digest news from the Federal Reserve earlier this week, as well as a rise in Covid cases in Europe stemming from an emerging subvariant and the ongoing war between Russia and Ukraine.

"The worst thing about any crisis is when it first hits out of left field, it creates nothing but uncertainty. You have no idea what it means or where it's going to go, and you react violently as an investor to get out of the way," Jim Paulsen, chief investment strategist for The Leuthold Group, told CNBC's "Closing Bell." "But after you've had some time to vet it [you see] the market is suggesting that they're starting to feel a little better, that there's some direction of this thing... It does seem like the economic fallout will not be nearly as detrimental as it looked going in."

President Joe Biden spoke with Chinese President Xi Jinping on Friday to discuss Russia's invasion of Ukraine. Xi told Biden that the United States and China each had an obligation to promote peace. Russia has made requests for military or economic aid from China and the call was seen as a critical test of whether Biden can convince Beijing to stay on the sidelines of the conflict.

Several missiles hit an aircraft repair center on the outskirts Lviv in western Ukraine. A Ukrainian official also said one person was killed in an airstrike that hit Kyiv. (Click here for live updates.)

Russia on Thursday reportedly made a $117 million bond payment in dollars, thereby avoiding what would be a historic foreign currency debt default. Stocks extended their gains following the report. Bloomberg reported Friday that clearing houses in Europe and the U.S. have processed the payment.

Investors were also assessing their own risk appetite. The week's big gains came with a side of volatility, which shows no signs of tempering anytime soon.

"For 2022, volatility is going to be the investor narrative," Greg Bassuk, CEO of AXS Investments, told CNBC. "We would normally feel much more bullish around any single factor having a good ability to level the volatility, but given this unprecedented level of very significant factors that could drive the markets one way or another, we don't see volatility normalizing over the next couple of months."

On Friday tech stocks led the market higher. Salesforce and Apple were among the top gainers in the Dow, rising 3.9% and 2%, respectively. Nvidia climbed 6.8%. Meta Platforms gained 4.1%, and software stocks Paycom and Fortinet advanced 4.6% and 5.4%.

Shares of Moderna rose 6.3% as the company seeks FDA approval for a second Covid-19 booster shot for adults 18 years or older.