Wall Street Today | US Stocks Build on November Gains

US stocks gained, with the major indices building on their biggest monthly rally in over a year, as US Federal Reserve Chairman Jerome Powell’s comments failed to douse hopes that policymakers are done hiking interest rates.

Equities have extended their rally amid optimism that a slowdown in the economy and consumer spending are helping bring down inflation closer to the Fed's 2% target. The latest data bolstered hopes that policymakers could begin cutting interest rates next year, fueling bets for continued gains in the stock market.

US manufacturing contracted for a 13th straight month in November, data from the Institute of Supply Management showed. That adds to signs of a slowdown that could prompt the central bank to start lowering borrowing costs. The data came just days after the Fed released its beige book showing sales of discretionary items and durable goods, like furniture and appliances, declining, on average, as consumers showed more price sensitivity.

Investors are betting that Fed funds rate have peaked and policymakers will begin lowering interest rates next year. They remain undeterred even after Powell said Friday that it would be premature to speculate when monetary policy might ease. While he reiterated that the Fed is prepared to raise interest rates if needed, Powell also noted that the risks of over- and under-tightening monetary policy are becoming more balanced, spurring speculation that rates are already at their peak.

Powell delivered his comments in Atlanta just days after Fed Governor Christopher Waller hinted that the central bank could start lowering rates if inflation keeps slowing over the next several months, adding that "there is no reason to say we will keep it really high."

Gold futures settled at the highest level ever as expectations of declining interest rates boosted the investment appeal of the precious metal that doesn't offer any yield. Crude oil fell amid mounting skepticism whether the announced voluntary cuts in production of the Organization of Petroleum Exporting Countries (OPEC) and its partners will actually materialize.