The Russian military's stunning collapse in eastern Ukraine is injecting optimism into markets, analysts say

• Ukraine's counteroffensive in its war against Russia is lifting Wall Street's mood, analysts say.

• The government in Kyiv said it has retaken about 3,500 square miles of territory from Russia.

Ukraine's counteroffensive against Russia is sending stocks higher on optimism that the war could find an end sooner than previously thought, according to analysts.

Earlier this month, Ukraine launched attacks in the southern and eastern parts of the country, and some on Wall Street noted last week that earlier gains coincided with a rally in the stock market.

And over the weekend, Russia's defensive lines in eastern Ukraine collapsed as troops fled in disarray and panic, leaving behind weapons, ammunition and even their own comrades. The government in Kyiv said it has retaken about 9,000 square kilometers, or 3,500 square miles, of territory from Russia since launching its offensive.

US stocks continued to climb on Monday after they notched their first weekly gain to snap a three-week losing streak.

"The upbeat mood is being helped as well by advances by Ukraine in the war. Suddenly investors are opening their eyes to the possibility of a sooner end to the war," wrote City Index analyst Fionna Cincotta.

Wharton Business School's Jeremy Siegel also chimed in on Monday, telling CNBC that the latest Ukrainian advances "may mean some sort of settlement going forward."

Elsewhere, PineBridge Investments multi-asset portfolio manager Hani Redha said the latest news out of Ukraine "is creating some glimmers of hope for the market that there might be a resolution and provide some relief on the intensity of the energy shock."

An end to the war in Ukraine could provide some stability to a volatile energy market which has been upended since Vladimir Putin launched the invasion of Ukraine in February.

State-run Gazprom has indefinitely cut off gas flows to Europe via the Nord Stream 1 pipeline, resulting in soaring electricity prices and calls for market interventions and energy rationing over the winter

Still, Russia had previously struggled in earlier months of the war to hold on to advances in Ukraine only to reverse course and drive deeper into the country. Stocks rallied late March on the prospect of talks between Russia and Ukraine in Turkey which did not produce an agreement.