Major U.S. stock indexes notched their best week since November 2020 as oil prices stayed below recent highs and investors embraced signs of confidence in the U.S. economy from the Federal Reserve.

The gains returned the $S&P 500 index(.SPX.US)$, the $Dow Jones Industrial Average(.DJI.US)$ and the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ to positive territory for March, despite the elevated commodity prices and geopolitical anxieties that have weighed on stocks recently.

The S&P 500 ended Friday with a gain of 6.2% for the week, while the Dow Jones Industrial Average advanced 5.5% in that time. The tech-heavy Nasdaq Composite climbed 8.2%. All three indexes recorded their best weekly performance since the week ended Nov. 6, 2020, as votes from the last presidential election were still being counted.

Big tech stocks clawed back some of their recent losses to help pull the market higher. Shares of $Meta Platforms(FB.US)$ advanced 15% for the week, while $Amazon(AMZN.US)$ gained 11% and $Microsoft(MSFT.US)$ rose 7.3%. Shares of fast-growing companies, including many technology names, have suffered lately as the central bank's plans to raise interest rates threaten the value of their future earnings.

The S&P 500 on Friday rose 51.45 points, or 1.2%, to 4463.12. The Dow Jones Industrial Average added 274.17 points, or 0.8%, to 34754.93. The Nasdaq Composite advanced 279.06 points, or 2%, to 13893.84.

Investors showed increased enthusiasm for U.S. stocks after two weeks of declines for the S&P 500 and five weeks of losses by the Dow Jones Industrial Average. They say the solid fundamentals of many U.S. companies will allow them to deliver profits in the face of higher costs and growing geopolitical uncertainty. Many believe the strong U.S. labor market will help consumers keep the economy growing.

Analysts also pointed to a positive tone from the U.S. central bank, where officials this week voted to lift interest rates in an effort to slow inflation. Fed Chairman Jerome Powell  cited strong household balance sheets and consumer demand to deflect worries about the potential for a recession in the next year.

The U.S. economy is on a really solid foundation right now, and it's a key reason why the Fed is feeling comfortable in moving forward with their tightening process without potentially putting the U.S. in a recessionary type of environment." 

-said Jeff Schulze, investment strategist at ClearBridge Investments.

Central bank officials signaled their interest-rate increase of one-quarter of a percentage point would be followed by six more increases this year. The move seemed to calm fears among some investors that inflation would spiral upward.

"What you're seeing is that there is a sense that the market believes that the Fed is going to be able to get inflation under control," said Whitney Sweeney, investment strategist at Schroders.

A pause in the recent climb in oil prices eased pressure on stocks. Brent crude, the global oil benchmark, settled Friday at $107.93 a barrel, down 4.2% for the week. Early last week oil at times traded above $130 a barrel.

Russia's invasion of Ukraine drove oil prices above $100 a barrel for the first time since 2014 as investors bet on disruptions to resource exports from the region. The jump in energy costs has heightened concerns about inflation, which was already at a 40-year high in the U.S.

Traders remain concerned about lower oil supplies due to longer-term sanctions on Russia amid signs that the conflict may drag on. Russian and U.S. officials said Thursday that talks between Moscow and Kyiv on a cease-fire hadn't yielded progress.

Sentiment remains fragile, and the risk of further escalation remains a real concern despite the gains of the last two weeks." 

-said Michael Hewson, chief markets analyst at CMC Markets.

In economic news, U.S. existing-home sales fell 7.2% in February, the National Association of Realtors said Friday, while February sales fell 2.4% from a year earlier. The average rate for a 30-year fixed mortgage recently topped 4% for the first time since 2019.

Investors are watching closely for signs of weakness in the U.S. economy as the Fed begins to raise rates and households and businesses cope with higher energy costs. New data points that change the outlook could prompt big moves in the market.

We still feel the recession risk this year is very low, but we're likely to remain in an environment of a lot of volatility." 

-said Steven Violin, portfolio manager at F.L.Putnam Investment Management.

Among individual stocks, FedEx fell $9.07, or 4%, to $218.91 Friday after it reported lower shipping volumes and said profit margins were coming under pressure.

The yield on the benchmark 10-year U.S. Treasury note fell to 2.146% Friday from 2.192% on Thursday but rose for the week. Yields rise as prices fall.

Overseas, the pan-continental Stoxx Europe 600 added 0.9% Friday to end the week with a gain of 5.4%, its best week since November 2020.

The Russian stock market remained closed. The country's central bank hasn't yet said if it will open next week. The central bank kept its key policy rate steady at 20%. The Russian state avoided default by making coupon payments on dollar-denominated sovereign bonds on Thursday.

Markets were positioned for a technical default of Russia, people were surprised." 

-said Ludovic Subran, chief economist at Allianz.

In Asia, most major benchmarks rose. Chinese stocks were mixed, with the Shanghai Composite Index rising for the third consecutive trading session. Hong Kong's Hang Seng Index slid 0.4% on Friday but still closed more than 4% higher for the week.