Dow edges higher Friday, building on Thursday's sharp rebound, as investors assess fighting in Ukraine

Stocks rose 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 130 points, or 0.4%. The S&P 500 inched up 0.2%. The Nasdaq Composite was down 0.5%.

"With a broader Russian invasion of Ukraine underway, the potential geopolitical, economic, and asset implications of the conflict between Russia and the West over Ukraine are once again Top of Mind," Goldman Sachs' Allison Nathan said in a note.

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. That came a day after U.S. Secretary of State Antony Blinken told CBS that Kyiv "could well be under siege" soon.

Market sentiment got a boost after multiple reports that Russian President Vladimir Putin is ready to send a delegation to Belarusian capital Minsk for negotiations with Ukraine.

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.

Government bond yields were slightly higher Friday after falling Thursday. Yields move opposite prices. The benchmark 10-year Treasury note yield on Friday rose above 2%, before easing to the 1.98% level.

Etsy shares on Friday rose 5% after the online marketplace's quarterly results beat analyst estimates. Shares of Beyond Meat tumbled more than 14% and Foot Locker sunk more than 34% after disappointing earnings reports.

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.

"Russia invading Ukraine has added to an already tense year, with investors selling first and asking questions later," said LPL Financial Chief Market Strategist Ryan Detrick. "But it is important to know that past major geopolitical events were usually short-term market issues, especially if the economy was on solid footing."

Despite Thursday's wild intraday reversal, the major averages are on track for their third negative week in a row amid escalated geopolitical tensions and worries over monetary policy.

The S&P 500 and Nasdaq Composite are still in correction territory, or down at least 10% from their respective record highs. The Dow is about 9% off its high.

"While there may be some additional volatility in the short term, these dislocation events historically present opportunities, as long as recession doesn't follow," said Cliff Hodge, CIO at Cornerstone Wealth. "Higher energy prices will also support sticky inflation which may keep pressure on the Fed to stay on course."