(Updates to market close)

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Deutsche Bank sees S&P 500 rising to 8,000 by 2026 end

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Bristol Myers gains after rival's positive late-stage data

By Stephen Culp

NEW YORK, Nov 24 (Reuters) - Wall Street stocks closed

higher on Monday, extending Friday's rally as increased odds

that the U.S. Federal Reserve will lower its Fed funds target

rate in December helped investors look past concerns about

inflated tech valuations.

U.S. indexes embarked on the holiday-shortened week with

solid gains, with strength in the "Magnificent Seven" group of

artificial-intelligence-related momentum stocks putting the

tech-heavy Nasdaq out front.

A spate of economic reports, belatedly released after the

recent six-week government shutdown, hinted at labor market

weakness and stubbornly elevated inflation, which has bolstered

investor optimism that the Fed will implement its third and

final interest rate cut of 2025 at the conclusion of its

December monetary meeting.

INVESTORS 'BREATHE SIGH OF RELIEF'

Dovish commentary from Fed Governor Christopher Waller, New York

Fed President John Williams, and San Francisco Fed President

Mary Daly lent some support to that optimism, although other

policymakers voiced dissenting opinions.

"The street is falling into the line of thinking that a

rate cut is coming in December," said Robert Pavlik, senior

portfolio manager at Dakota Wealth in Fairfield, Connecticut.

Financial markets are pricing in an 85% likelihood of that

occurring, up from 42.4% a week ago, according to CME's FedWatch

tool.

The release of economic data is set to continue this week,

with retail sales, producer prices, and new orders for durable

goods joining independent indicators such as Case-Shiller home

prices, the Conference Board's consumer confidence report and

the National Association of Realtors' pending home sales data.

Third-quarter reporting season is drawing to a close. As of

Friday, nearly 95% of the companies in the S&P 500 have

reported, 83% of which delivered better than expected earnings.

Analysts now expect third-quarter aggregate earnings growth of

14.7% for constituents of the bellwether index, a significant

improvement over the 8.8% estimate on October 1, according to

LSEG data.

According to preliminary data, the S&P 500 gained

101.11 points, or 1.53%, to end at 6,705.69 points, while the

Nasdaq Composite gained 597.01 points, or 2.68%, to

22,870.09. The Dow Jones Industrial Average rose 195.44

points, or 0.42%, to 46,440.85.

The U.S. holiday shopping season kicks off this week,

starting with Thursday's Thanksgiving holiday.

The health of the consumer, who shoulders about 70% of the

U.S. economy, will be assessed for any signs of weakness amid

increased layoff announcements and weak survey reports. Even

so, the National Retail Federation expects holiday sales to top

$1 trillion for the first time.

Earnings from consumer-oriented companies such as Best Buy ( BBY )

are expected later this week.

TECH VALUATION WORRIES LINGER

AI bellwether Nvidia's ( NVDA ) strong forecast last week failed

to assuage looming fears of a potential AI bubble.

The S&P 500 and Nasdaq remain on track for monthly losses.

Deutsche Bank helped revive investor risk appetite after

projecting the S&P 500 would reach 8,000 by the end of next

year, the most bullish forecast among major global brokerages.

Bristol Myers gained after European rival Bayer

unveiled positive late-stage data for its

cardiovascular drug, boosting confidence in Bristol Myers'

experimental drug milvexian.

Centene ( CNC ) and Oscar Health ( OSCR ) jumped following a

report that Trump is considering extending the Affordable Care

Act's subsidies for two years.