Stocks rose to start the last week of the year, pushing the S&P 500 closer to record levels.

The S&P 500 climbed 0.42% to end at 4,774.75, while the Nasdaq Composite advanced 0.54% to settle at 15,074.57. The Dow Jones industrial Average gained 159.36 points, or about 0.43%, to close at 37,545.33.

The Nasdaq 100 gained 0.6% and notched an all-time high and record close, ending the session at 16,878.46.

Despite weaker volume, Tuesday's moves likely signal a continuation of the positive market trends boosting major indices in recent weeks, said Keith Lerner, Truist's co-chief investment officer.

"You still have money dripping in even though it's weakened, and a solid bid underneath the surface as we head into year end," he said. "That's likely to continue."

The S&P 500 ended Tuesday's session within striking distance of record levels. The broad market index is less than 1% below its closing all-time high of 4,796.56 set in January 2022.

Wall Street came into the holiday-shortened week with momentum, after the S&P 500 on Friday registered its eighth straight weekly advance and longest streak since 2017. The Dow and Nasdaq Composite also notched an eight-week winning streak.

Those moves come as investors cheer recent data showing inflation is moving closer toward the Federal Reserve's 2% target. Expectations of potential rate cuts in the new year have also lifted equities in recent weeks.

"I don't love the term, but if you were to describe what is happening it's definitely Goldilocks for the market," said Jan Szilagyi, CEO and co-founder of Toggle AI. "Inflation's coming down, the economy is still chugging along, and the hiking cycle's over. On all of these macro trends, the rally has been justified."

In other news, Intel jumped 5.2% after Israel's government gave the chipmaker a $3.2 billion grant for a $25 billion plant in the country's south. Manchester United added 3.4% after British billionaire Jim Ratcliffe finalized a deal to buy a quarter of the soccer club.

Stocks finish higher, S&P edges closer to record

Stocks finished higher to kick off the final trading week of 2023.

The S&P 500 climbed 0.4% to end at 4,774.75, while the Nasdaq Composite advanced 0.5% to settle at 15,074.57. The Dow Jones industrial Average gained 159.36 points, or about 0.4%, to close at 37,545.33.

— Samantha Subin

Tuesday's gain pushes S&P 500 closer to all-time closing high

The S&P 500 inched closer to a new closing high in Tuesday's session.

The broad index last traded around the 4,780 level. That's about 0.35% from the highest level the index has ever concluded a session at, which was seen in January 2022.

— Alex Harring

Broad rally pushes S&P 500 higher

The S&P 500 was propelled higher by a broad rally among member stocks on Tuesday.

All 11 sectors of the benchmark index were higher in afternoon trading, helping the index rise 0.5%. Real estate, utilities and industrials were the best performing sectors, all up about 0.8%. On the other hand, communication services posted the smallest gain with a 0.3% advance.

— Alex Harring

Wolf Research's Chris Senyek says Fed will cut rates for 'the wrong reasons' next year

The market is getting ahead of itself, according to Wolfe Research's chief investment strategist Chris Senyek, particularly as it's pricing in interest rate cuts that may not necessarily result in the highly anticipated 'soft landing' economy.

"I think that we're very much priced for perfection, if you think about the rally. We've only priced in now that soft landing scenario," Senyek told CNBC's 'Squawk on the Street' earlier Tuesday. "As we get into the spring and early summer, I think the Fed's going to be cutting for the wrong reasons. I think the economy is going to slow, the lagged impacts of rate hikes will get the economy."

Senyek added that his firm thinks the Federal Reserve will cut interest rates "a few times" next year, but that he doesn't think those moves will be enough to stave off a deeper-than-expected downturn. Companies' wage growth, oil prices, and stronger-for-longer employment levels are some of the major swing factors that could impact disinflation over time, the strategist said.

— Pia Singh

Something is going break in the economy, says Komal Sri-Kumar

The market is feeling good about the prospects of a soft landing. Komal Sri-Kumar isn't so sanguine.

"My expectation is that something is going to break in the system," the president of Sri-Kumar Global Strategies told CNBC's "Money Movers" on Tuesday. "Whether it comes from commercial real estate, whether it is going to be further bank failures, or whether it's going to be a credit crunch. I think the impact is going to be failing."

— Fred Imbert

Energy stocks outperform, gain as oil prices rise

Energy stocks were among the best performers in the S&P 500, boosting the sector 1.3% as oil prices gained more than 3% as attacks on ships in the Red Sea fueled shipping disruption fears.

APA Corp wast the best performer in the sector, rising 3.6%. Marathon Oil, Devon Energy, Diamondback Energy and Baker Hughes jumped about 2% each. WIlliams Companies was the worst-performing stock in the sector, gaining 0.2%.

Utilities stocks also gained on Tuesday, lifting the S&P sector 0.9%. Edison International and Constellation Energy were the best performers, jumping 3% and 3%, respectively.

— Samantha Subin

Expect more pressure ahead for oil, Again Capital's Kilduff says

Oil has had a tough year, and John Kilduff doesn't see things getting any easier for the commodity.

"In the year ahead, we'll scale some heights temporarily, but for the most part there are big headwinds here in terms of the economic outlook," Kilduff, founding partner of Again Capital, told CNBC's "Squawk on the Street."

He noted the global economic outlook is softening, "and that's going to speak right to crude oil demand [and] energy demand for the next year." He also said that, "with the United States doing what it's doing in terms of record production, sky high exports ... OPEC+ just can't cut enough to sustain a price much above where we are right now."

West Texas Intermediate futures jumped more than 3% on Tuesday but remained 5.4% lower for 2023.

— Fred Imbert

Health care is looking like a good 'contrarian' pick, BTIG's Krinsky says

BTIG's Jonathan Krinsky says health-care stocks are a "solid contrarian idea" heading into the new year. The sector isn't known for being the best-performing. In fact, it's only snagged that title once over the past 15 years — in 2018.

"The Healthcare Sector has been in a wide trading range for ~2.5 years," Krinsky wrote. "An upside resolution from this range in '24 could be powerful and would suggest relative outperformance after testing 2021 lows."

Pfizer's stock has been down for eight straight months, a pattern Krinsky said is "awful" but shares have "major support." If an investor wanted to try a "Dogs of the Dow" strategy with a non-Dow stock, Pfizer "fits the bill," the chief market technician said.

As for biotech stocks, Krinsky said the sector could be trying to break out.

"The biotech ETF (XBI) is up more than 30% from its recent lows, but still down over 50% from its all-time high made nearly three years ago. It has been basing over the last two years, but really needs to clear $90 to suggest a new uptrend has started," he wrote.

—Christina Cheddar Berk

Lululemon, Arista Networks trade near all-time highs

A handful of stocks in the S&P 500 hit fresh highs during Tuesday's session. That included Lululemon and Arista Networks, which last traded near levels not seen since their respective initial public offerings in 2007 and 2014.

These are some of the other companies trading near new highs:

• Alphabet C share trading at levels not seen since April 2022
• Alphabet A share trading levels not seen since April 2022
• News Corp B trading at levels not seen since August 2021
• News Corp. trading at levels not seen since November 2021
• Expedia trading at levels not seen since May 2022
• NVR, Inc. trading at all-time high levels back to post-bankruptcy IPO in November 1993.  
• Intercontinental Exchange trading at levels not seen since April 2022
• Broadridge Financial Solutions trading at all-time high levels back to its IPO in March 2007
• CSX trading at levels not seen since May 2022
• Cintas trading at all-time high levels back to its IPO in 1983
• Fastenal trading at all-time high levels back to its IPO in August 1987
• Ingersoll-Rand trading at all-time high levels back through our history to 1972
• Nordson trading at levels not seen since December 2021
• Union Pacific trading at levels not seen since April 2022
• Accenture trading at levels not seen since February 2022
• Applied Materials trading at levels not seen since January 2022
• CDW Corp trading at all-time highs back to its IPO in July 2013. 
• Intel Corporation trading at levels not seen since March 2022
• Intuit trading at levels not seen since January 2022
• Lam Research trading at all-time high levels back to its IPO in May 1984
• Micron trading at levels not seen since March 2022
• PTC Inc trading at all-time highs back to its IPO in 1989
• Qualcomm trading at levels not seen since August 2022
• Western Digital trading at levels not seen since June 2022
• Celanese trading at levels not seen since June 2022
• Sherwin-Williams trading at levels not seen since January 2022
• CBRE trading at levels not seen since April 2022
• NRG Energy trading at all-time highs back to its IPO in May 2000

— Samantha Subin, Chris Hayes

Mastercard SpendingPulse sees retail sales up 3.1% this holiday season

The Spdr S&P Retail ETF is up nearly 12% this month and for good reason. Mastercard Spending Pulse data suggests retail spending climbed 3.1% this holiday season from last year, excluding autos.

According to the firm's data, which tracks in-store and online retail sales across all payment types, shoppers turned out for the holiday season. They were careful with their purchases, often hunting for bargains, but they wanted to celebrate with their family and friends, and they did.

Apparel seems to have been a strong category, with sales up 2.4% year over year, Mastercard said. But the big winner was restaurants, with sales up 7.8% from last year, it said.

Electronics and jewelery sales were weak, showing declines year over year, according to Mastercard.

—Christina Cheddar Berk

Stocks making the biggest midday moves

These are some of the stocks making notable moves during Tuesday's session:

• Intel — Shares added 4.6% after Israel's government announced a $3.2 billion grant for the semiconductor company to build a $25 billion chip plant in the country.
• Gracell Biotechnologies — Shares soared about 60% after AstraZeneca announced that it will buy the Chinese cell therapy company. Meanwhile, AstraZeneca was trading near flat.
• Nio — The Chinese electric vehicle maker jumped about 9% on the back of its flagship sedan announcement.

See the full list here.

— Alex Harring

Semiconductor stocks rise with Intel

A handful of semiconductor stocks rose alongside Intel. The chipmaker popped 4% on news of a $3.2 billion grant to build its $25 billion factory in Israel.

Nvidia, Advanced Micro Devices, Micron Technology and Qualcomm rose 1% each. Teradyne, Lam Research and Qorvo gained more than 1%. Both the iShares Semiconductor ETF and VanEck Semiconductor ETF added 1.3%.

— Samantha Subin

Small caps hit highest level in more than a year

The Russell 2000 climbed 0.5% to reach its highest level since April 2022, in a sign of broadening participation during the recent market rally. The index's best performer is RayzeBio, which doubled on news it's being acquired by Bristol Myers Squibb.

— Fred Imbert

Oil prices rise on Tuesday, adding to last week's gains

Oil prices climbed more than 2% on Tuesday as investors monitored conflict in the Middle East and the likelihood of forthcoming U.S. interest rate cuts.

Brent crude futures rose $1.79, or 2.3%, to $80.86 a barrel. U.S. West Texas Intermediate crude added $1.89, or 2.6%, to $75.45.

Tuesday's gains extend last week's advance as the Israel-Hamas war shows little signs of a resolution. Growing confidence that the Federal Reserve will cut interest rates in 2024 also helped oil prices.

— Alex Harring, Reuters

Intel, Caterpillar among best performers in the Dow

Intel was the best performer in the Dow Jones Industrial Average, rising nearly 3% on news of a new chip plant in Israel.

Caterpilar was another notable gainer, last up about 1.3%. 3M, Walgreens Boots Alliance and Chevron added less than 1% each.

— Samantha Subin

Stocks open higher to kick off the trading week

Stocks opened higher on Tuesday to kick off the holiday-shortened trading week.

The S&P 500 added 0.15%, while the Nasdaq Composite jumped 0.3%. The Dow Jones Industrial Average rose 10 points.

— Samantha Subin

October home prices post biggest gain of 2023

Home prices rose 4.8% nationally in October compared with October 2022, according to the S&P CoreLogic Case-Shiller home price index. That's a jump from the 4% annual increase in September and marks the strongest annual gain seen in 2023.

The strength in home prices came despite a sharp rise in mortgage interest rates in October. The average rate on the 30-year fixed loan crossed 8% on Oct. 19, according to Mortgage News Daily.

— Diana Olick, Yun Li

Former Fed official Kaplan sees rate cuts coming

Former Dallas Federal Reserve President Robert Kaplan said Tuesday he expects the central bank to start lowering rates soon as it seeks to seeks to avoid a recession as inflation recedes.

Kaplan said during a CNBC "Squawk Box" interview that officials will want to avoid keeping policy too strict and will need to adjust their benchmark borrowing late lower if the rate of inflation continues to decline.

A Commerce Department report Friday showed that personal consumption expenditures prices in November fell for the first time since April 2020.

"One of the reasons we got into this inflationary problem is the Fed stayed way to accommodative for too long, even as the economy was improving, and I don't think it wants to make the same mistake on the flip side, where it stays too restrictive," Kaplan said. " As the economy and inflation softened. It doesn't want to make the opposite mistake either."

— Jeff Cox

Stocks making the biggest moves premarket: Intel, Synopsys and more

Check out the companies making headlines before the bell:

• Intel — The semiconductor stock climbed 2.2% on news that Israel's government agreed to grant Intel $3.2 billion for a new $25 billion chip plant the company plans to build in southern Israel. That makes the investment the largest ever by a company in Israel, Reuters reported. 
• Manchester United — Shares of the soccer club rose 4.3% after British billionaire Jim Ratcliffe finalized a deal to buy a quarter of Manchester United. Ratcliff will pay $33 per share. Shares closed at $19.84 on Friday.
• Gracell Biotechnologies — The stock popped nearly 60% after pharmaceutical giant AstraZeneca said it will buy the China-based cell therapy company for up to $1.2 billion. AstraZeneca's shares were down by less than 0.1%. 

For the full list, read here.

— Pia Singh

Bristol Myers Squibb will buy RayzeBio

Bristol Myers Squibb said Tuesday it will acquire radiopharmaceutical therapeutics company RayzeBio for $62.50 per share. The deal values RayzeBio at $4.1 billion and is expected to close in the first half of 2024.

Bristol shares were up marginally, while RayzeBio doubled in the premarket.

"This transaction enhances our increasingly diversified oncology portfolio by bringing a differentiated platform and pipeline, and further strengthens our growth opportunities in the back half of the decade and beyond," said Christopher Boerner, Bristol Myers Squibb chief executive.

— Fred Imbert

Stock futures tick higher to start the week

Stock futures were slightly higher Tuesday morning, as traders tried to maintain their momentum seen in recent weeks.

Dow Jones Industrial Average futures were up 43 points, or 0.1%. S&P 500 futures gained 0.1%, and Nasdaq-100 futures climbed 0.2%.

— Fred Imbert