US STOCKS-Wall Street rises on hopes of Fed rate hike pause, debt ceiling deal cheer

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Salesforce down on slow revenue growth

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C3.ai plunges on dour revenue outlook

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Goldman Sachs falls, co plans more job cuts

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Indexes up: Dow 0.61%, S&P 500 1.07%, Nasdaq 1.41%

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By Herbert Lash and Shreyashi Sanyal

June 1 (Reuters) - U.S. stock indexes rose on Thursday as investors cheered a vote in Congress to suspend the U.S. debt ceiling, while signs of slowing wage pressure on inflation added to growing optimism the Federal Reserve will skip raising interest rates in two weeks.

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 jobs market that could push the Fed to keep rates elevated.

But 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.

"Unit labor cost data for the first quarter normally doesn’t trigger a reaction. But it signaled a significant improvement," said Edward Moya, senior market analyst at OANDA in New York.

"The market became confident that, 'wow the Fed rate hike for June is pretty much not happening' and confidence is falling for raising rates for July," he said.

Futures trading showed a 75% probability that the Fed will desist from hiking rates at its June 13-14 policy meeting, according to CME Group's FedWatch Tool.

The bill approved Wednesday in the House of Representatives to suspend the $31.4 trillion debt ceiling headed to the Senate, which must enact the measure before a Monday deadline when the government could run out of money.

With signs of progress in the debt ceiling saga, focus will now shift to the Labor Department's closely watched jobs report for May, due on Friday. The data will help determine whether the Fed sticks with its aggressive interest rate-hiking cycle.

Fed officials on Wednesday suggested a pause in hiking rates was possible, but said that was dependent on data and would let that decide.

The Dow Jones Industrial Average rose 201.97 points, or 0.61%, to 33,110.24, the S&P 500 gained 44.85 points, or 1.07%, to 4,224.68 and the Nasdaq Composite added 182.02 points, or 1.41%, to 13,117.31.

Limiting gains on the Dow, Salesforce Inc fell 4.0% after the company posted its slowest pace of revenue growth in 13 years.

Goldman Sachs Group Inc lost 1.7% after the lender revealed plans of more workforce reductions as the difficult economic environment weighs on dealmaking.

Meta Platforms Inc added 3.46%, helping boost the Nasdaq after unveiling its next-generation mixed reality headset.

Dollar General Corp slid 18.2% as retail companies cut their full-year sales forecasts as high inflation dimmed American consumer outlook.

C3.ai Inc slumped 13.2% after the artificial intelligence company ITS forecast annual revenue outlook below Wall Street estimates.

Advancing issues outnumbered declining ones on the NYSE by a 3.51-to-1 ratio; on Nasdaq, a 2.33-to-1 ratio favored advancers.

The S&P 500 posted five new 52-week highs and 18 new lows; the Nasdaq Composite recorded 46 new highs and 96 new lows.

(Reporting by Herbert Lash, additional reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and Deepa Babington)