U.S. stocks rallied on Thursday, led by a 3-percent gain in the Nasdaq, in a dramatic market reversal as U.S. President Joe Biden unveiled new sanctions against Russia after Russia launched a military operation against Ukraine.

The S&P 500 rose more than 1 percent, ending a four-day slide amid worries over the escalating crisis. The Dow also ended in positive territory.

Investors rediscovered their risk appetite overnight after some initial sharp losses. Early in the session, the Nasdaq was down more than 20 percent from its November closing record high. 

The information technology sector rose 3.5 percent and gave the S&P 500 its biggest boost, in a reversal from recent action.

The Dow Jones Industrial Average rose 92.07 points, or 0.28 percent, to 33,223.83, the S&P 500 gained 63.2 points, or 1.50 percent, to 4,288.7 and the Nasdaq Composite added 436.10 points, or 3.34 percent, to 13,473.59.

"Tech had the most technical damage, so it's good to see tech pick up the pieces," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia.

The S&P 500 earlier this week confirmed that it was in a correction. A correction is confirmed when an index closes 10 percent or more below its record closing level.

The CBOE Volatility index, known as Wall Street's fear gauge, ended lower on the day.

The S&P 500 posted 2 new 52-week highs and 64 new lows; the Nasdaq Composite recorded 19 new highs and 974 new lows.

Volume on U.S. exchanges was 17.52 billion shares, compared with the 12.1 billion average for the full session over the last 20 trading days.

Asian markets

Asian shares regained ground. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.68 percent, while Japan's Nikkei was trading up 1.53 percent. 

The benchmark Shanghai Composite rose 0.54 percent at 3,448.35 points. The Shenzhen Component Index gained 1.08 percent to end at 13,395.31 points at midday.

South Korean shares also bounced back from a one-month low hit in the previous session.

Oil prices

Oil prices, which jumped on Thursday before falling back, rose again on Friday on worries about supply disruptions. Brent crude futures were up 2 percent at $101.20 a barrel, while U.S. West Texas Intermediate (WTI) crude also rose to $94.46, although both benchmarks were off their highs.

"Going forward, we're still subject to probably higher oil prices, probably higher commodity prices," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

(With input from Reuters)