Stocks rose higher on Tuesday as market participants responded positively to more cooling inflation data ahead of the Federal Reserve's next and last policy decision of the year on Wednesday. The Dow Jones Industrial Average rose more than 170 points, while the S&P 500 Index and Nasdaq Composite added about 0.5% and 0.7%, respectively.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): +0.46% or +21.26 points to 4,643.70

Dow Jones Industrial Average (DIA  ): +0.48% or +173.01 points to 36,577.94

Nasdaq Composite Index (QQQ  ): +0.70% or +100.91 points to 14,533.40

In the spotlight, November's consumer price index (CPI) rose 0.1% month-to-month, the Labor Department reported Tuesday, coming slightly above economists expectations. On an annual basis, prices rose 3.1%, coming in-line with estimates. So-called core CPI, which omits volatile food and energy prices, increased 0.3% on the month and 4% from a year ago -- both coming in-line with expectations.

While November's print remains above the Fed's 2% inflation target, prices continue to stabilize in response to higher interest rates. Market participants are now looking ahead towards the central bank's final policy decision of the year, due out Wednesday afternoon, with most analysts expecting policymakers to hold interest rates at their current range of 5.25% to 5.50%. Moreover, Fed Chair Jerome Powell will offer more clues on the central bank's rate decisions in the new year in his commentary following December's policy decision.

In single-stock news, Walgreens Boots Alliance (WBA  ) is reportedly in talks to launch an initial public offering of the U.K.-based Boots pharmacy chain in London, according to Bloomberg sources familiar with the matter. The deal could value the chain at more than $8 billion, according to the report.

Lucid Group's (LCID  ) chief financial officer Sherry House announced her resignation, effective immediately. House will remain available in an advisory role through the end of the year to help with the company's transition.

On the earnings front, Oracle (ORCL  ) shares came under pressure after the software company reported a revenue miss for its fiscal second quarter. Looking ahead, Oracle expects adjusted net income of $1.35 to $1.39 per share and 6% to 8% revenue growth for its fiscal third quarter.

For Wednesday, investors will react to the Fed's policy decision, as well as fresh data on producer prices for November.