U.S. stocks extended gains on Tuesday, as Wall Street awaited the statement after the conclusion of Federal Reserve's two-day meeting on Wednesday.
The Dow Jones Industrial Average rose 156.41 points, or 0.90 percent, to 17,524.91. The S&P 500 gained 21.47 points, or 1.06 percent, to 2,043.41. The Nasdaq Composite Index added 43.13 points, or 0.87 percent, to 4,995.36.
The Federal Open Market Committee (FOMC) began the highly-watched meeting Tuesday, and will release its post-meeting statement at 2 p.m. Wednesday. The U.S. central bank is widely expected to raise interest rates for the first time since June 2006.
Analysts believed that the market has fully factored in the expected December rate hike. A recovery in oil prices also provided some upward jolts to the stock market. Both the U.S. oil and Brent crude posted solid gains on Tuesday, halting a slide to 11-year lows. In response, the energy sector surged 2.85 percent as the biggest advancer in the S&P 500's ten sectors.
On the economic front, the Consumer Price Index (CPI) for all urban consumers was unchanged in November on a seasonally adjusted basis, on par with market estimates, said the U.S. Labor Department Tuesday. Over the last 12 months, the all items index increased 0.5 percent before seasonal adjustment. The index for all items less food and energy, often referred to as the core CPI, rose 0.2 percent in November, the same increase as in September and October.
"The inflation story in 2015 has been one of divergence. Commodity prices continue to fall, taking the transportation sector down with it. Service prices, led by housing and medical care, are steadily rising," said Jay Morelock, an economist at FTN Financial, in a note.
Meanwhile, U.S. builder confidence in the market for newly constructed single-family homes remained relatively flat in December, dropping one point to 61 on the National Association of Home Builders/Wells Fargo Housing Market Index.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, fell 7.83 percent to end at 20.95 Tuesday. In other markets, oil prices rallied Tuesday as traders started to buy after sharp decline of last week.
The West Texas Intermediate for January delivery moved up 1.04 U.S. dollars to settle at 37.35 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery increased 53 cents to close at 38.45 dollars a barrel on the London ICE Futures Exchange.
The U.S. dollar increased against most major currencies on Tuesday as investors eyed the Fed's statement scheduled Wednesday. In late New York trading, the euro fell to 1.0918 dollars from 1.1000 dollars in the previous session, while the dollar bought 121.76 Japanese yen, higher than 120.83 yen of the previous session.
Gold futures on the COMEX division of the New York Mercantile Exchange fell on Tuesday, with the most active gold contract for February delivery dipped 1.8 dollars, or 0.17 percent, to settle at 1,061.60 dollars per ounce.
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