U.S. stocks closed higher on Tuesday as investors were digesting the impact of the missile launch by the Democratic People's Republic of Korea (DPRK), as well as major U.S. economic data.

The Dow Jones Industrial Average added 56.97 points, or 0.26 percent, to 21,865.37. The S&P 500 gained 2.06 points, or 0.08 percent, to 2,446.30. The Nasdaq Composite Index was up 18.87 points, or 0.30 percent, to 6,301.89.

The DPRK fired a missile early Tuesday and the missile fell into the Pacific Ocean off Hokkaido after passing over the Japanese archipelago, said the Japanese government.

The Japanese government said it will call for an emergency meeting of the United Nations Security Council and will call on the international community to cooperate and put more pressure on the DPRK.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose nearly 20 percent to trade at 13.50.

Tensions between the United States and the DPRK had risen earlier this month after U.S. President Donald Trump said the DPRK would face "fire and fury" if it continued to threaten the United States.

Meanwhile, investors also kept an eye on the energy sector as reports showed Hurricane Harvey had caused massive damage and forced evacuations in Texas.

On the economic front, the U.S. National Home Price NSA Index reported a 5.8 percent annual gain in June, slightly higher than in May, according to data from S&P CoreLogic Case-Shiller.

The Consumer Confidence Index rose to 122.9 in August, up from 120.0 in July, according to the Conference Board, beating market expectations.