Stocks closed higher on Monday as investors looked ahead to an important inflation update and the Federal Reserve's last policy decision of the year. The Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) both ticked up approximately 0.4% to close at their highest levels since January 2022 and March 2022, respectively. Tech stocks also saw gains, with the Nasdaq Composite (^IXIC) adding roughly 0.2% - its highest close since April 2022.

Investors are now focusing on two key events that could shape the market's direction in 2024: the release of November's Consumer Price Index (CPI) data and the Fed's interest rate decision. Friday's positive jobs report boosted hopes of a "soft landing" for the US economy, leading the S&P 500 and Nasdaq to end their sixth straight week of gains.

The Consumer Price Index data, due on Tuesday, is expected to reveal headline inflation of 3.1%, a slight deceleration from October's 3.2% annual gain. Lower energy costs, particularly gas prices, are likely to have contributed to this small dip. On a "core" basis, which excludes food and gas, prices are anticipated to have risen 4.0% over last year, matching October's increase. The market is closely watching this data as signs of cooling in inflation have solidified expectations that the Fed will pause rate hikes this week, with some even speculating about a future rate cut.

In individual corporate news, Macy's (M) shares surged nearly 20% after receiving a $5.8 billion buyout offer. The store chain's board is considering the bid to take the company private. Coinbase (COIN) stock dropped more than 6% as bitcoin experienced its most significant decline in four months, raising questions about the sustainability of the cryptocurrency's recent comeback.

Furthermore, reports swirled around Paramount Global (PARA) as shares slid over 3% following a surge on Friday. Private investment firm RedBird Capital and Skydance Media CEO David Ellison are reportedly exploring the acquisition of National Amusements' voting shares and considering taking control of the media conglomerate.

JPMorgan (JPM) strategist Marko Kolanovic warned of a potential "catch-22 situation" for US markets in 2024. Kolanovic suggested that a market rally may be unsustainable without a cut in interest rates from the Federal Reserve. He emphasized that even if the Fed reduces rates, equities will still face a different environment compared to the current one.

Overall, stocks closed mixed during afternoon trading on Monday as investors looked forward to the upcoming inflation update and the Fed's policy meeting. The market is seeking clues about the direction of interest rates and potential impact on the economy and various sectors.