(Updates to afternoon trading, adds market details)

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Alphabet up more than 4%

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Lilly becomes first drugmaker to join trillion-dollar club

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Indexes up: Dow 1.7%, S&P 500 1.8%, Nasdaq 1.9%

By Caroline Valetkevitch

NEW YORK, Nov 21 (Reuters) - U.S. stocks were sharply

higher on Friday as traders boosted bets on an interest rate cut

by the Federal Reserve next month following remarks from

policymakers and as shares of Nvidia ( NVDA ) rose following a report

that the U.S. was considering letting Nvidia ( NVDA ) sell H200 chips to

China.

Shares of Nvidia ( NVDA ) were up 1.4% after Reuters reported,

citing people familiar with the matter, that the Trump

administration is considering greenlighting sales of Nvidia's ( NVDA )

H200 AI chips to China.

New York Fed President John Williams, a voting member of the

Federal Open Market Committee, said the central bank can still

cut rates "in the near term" without putting its inflation goal

at risk.

Traders now see a more than 70% chance that the Fed will cut

its main lending rate by 25 basis points in December, up from a

near 37% chance seen earlier in the day, according to the CME

FedWatch Tool.

"The big tailwind today is that shift in rate cut odds for

the December Fed meeting," said Ross Mayfield, investment

strategist at Baird in Louisville, Kentucky.

The Dow Jones Industrial Average rose 798.49 points,

or 1.74%, to 46,550.75, the S&P 500 gained 117.44 points,

or 1.80%, to 6,656.20 and the Nasdaq Composite gained

426.50 points, or 1.93%, to 22,504.55.

Stocks have been volatile in the past two sessions,

reflecting heightened investor anxiety over sky-high valuations

in the technology sector and over what will happen at the

December Fed meeting.

Boston Fed President Susan Collins said on CNBC policy was

"in the right place," indicating skepticism about the need for

another rate cut. Her stance contrasts with dovish signals from

some peers, a divergence that could stoke market volatility

ahead of the December meeting.

Global brokerages remained divided over the likelihood of a

December rate cut after Thursday's release of the long-delayed

September jobs report, which marks the last employment reading

before the Fed's verdict next month.

Eli Lilly ( LLY ) shares hit a record and were up 2% after

the company became the first drugmaker to touch a $1 trillion

market capitalization.

Alphabet shares were sharply higher as well on

Friday and last up 4.3%.

Advancing issues outnumbered decliners by a 3.83-to-1 ratio

on the NYSE. There were 60 new highs and 200 new lows on the

NYSE.

On the Nasdaq, 3,536 stocks rose and 1,129 fell as advancing

issues outnumbered decliners by a 3.13-to-1 ratio.