The stock market closed higher ahead of a report that is expected to show a slowing in inflation, which will help shape the Federal Reserve's next steps.

In the run-up to the consumer price index, the S&P 500 rose above 4,400, while the Dow Jones Industrial Average gained nearly 1%. Energy companies led the way higher as West Texas Intermediate oil surpassed its key 100-day moving average. Activision Blizzard rose 10% after Microsoft received approval from a US court to proceed with its $69 billion takeover deal.

According to a 22V Research poll, 65% of respondents believe the core CPI, which excludes volatile food and energy prices, will be lower than expected. Furthermore, 54% of investors polled expect the report to be "risky."

Following a four-decade high in June 2022, CPI has steadily retreated in the face of the Fed's monetary policy onslaught. This slowdown has aided the stock market's rally this year, and bulls have good reason to be optimistic.