Wall Street rises on hopes of Fed pausing hikes, debt ceiling deal cheer

U.S. stock indexes closed up on Thursday as signs of slowing wage pressure on inflation raised hopes the Federal Reserve will pause raising interest rates in two weeks, and investors welcomed a vote in Congress to suspend the U.S. debt ceiling.

The number of Americans filing new claims for unemployment benefits rose modestly last week, while private payrolls increased more than expected in May, pointing to a still tight labor market that could push the Fed to keep rates elevated.

Focus now shifts to the Labor Department’s closely watched unemployment report for May, due on Friday. The data will help determine whether the Fed sticks with its aggressive rate hikes.

The Dow Jones Industrial Average rose 154.09 points, or 0.47%, to 33,062.36, the S&P 500 gained 41.26 points, or 0.99%, to 4,221.09 and the Nasdaq Composite added 165.70 points, or 1.28%, to 13,100.98.

Wage inflation is slowing, as reported by ADP, while a Labor Department report said the price of labor per single unit of output rebounded at a 4.2% rate in the first quarter – a downward revision from the 6.3% growth pace estimated in May.

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