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Midday Market Update

U.S. Shares Higher as CPI Rises 0.2%

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U.S. Markets
U.S. markets were in the green on news that the Consumer Price Index rose 0.2% in November. The CPI's year-on-year increase was 1.7%, its biggest increase since October 2014. The S&P, Nasdaq, and Dow were up 0.52%, 0.48%, and 0.52%, respectively. The Labor Department also said that core inflation, which excludes volatile energy and food costs, was up 0.2% in November. Core prices have risen 2.1% over the past year. Food prices on the other hand, showed no increase for a fifth-straight month.

The Fed raised the key interest rate by a quarter point to a range of 0.50% to 0.75%. The benchmark is still low by historical standards. Holding rates at low levels encourages borrowing and risk-taking. While Fed officials seem to have confidence in the strengthening U.S. economy, they judge that it still needs help. They continue to predict that the economy will expand at 2% for the next few years.  

Manjul Bhusal Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.