Wall Street's main indexes rose on Thursday as hotter-than-expected economic data did not dent hopes of a pause in rate hikes in September, while investors awaited Arm Holdings' stock market debut.

Shares of Arm Holdings will make their widely anticipated debut on the Nasdaq after the chip designer on Wednesday notched a $54.5 billion valuation in its IPO, priced at $51 per American Depositary Share.

Chipmakers including Nvidia, Micron Technology and Broadcom added between 0.6% and 1.4%.

"There's nothing better than AI chip stocks right now. Everybody wants a piece of it, it's like they're the belle of the ball," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

On the economic data front, retail sales rose more than expected in August on higher gasoline prices, while initial claims for state unemployment benefits climbed to a seasonally adjusted 220,000 for the week ended Sept. 9 from 217,000 the week before.

Monthly producer prices for final demand rose 0.7% last month, against expectations of a 0.4% increase. On an annual basis, they increased 1.6% compared with estimates of a 1.2% rise.

Data on Wednesday showed the annual rise in core consumer prices, excluding volatile items like food and energy, was the smallest in nearly two years.

"Investors are largely brushing off the hotter-than-expected inflation numbers, just like the consumer price index came in hotter than expected," said Greg Bassuk, chief executive officer at AXS Investments in New York.

"One of the reasons why investors are taking it in stride is because the data was largely driven by a jump in energy and gas ... however, investors should brace for another potential rate hike this year."

The two-year U.S. Treasury yield, which best reflects short-term interest rate expectations, hovered near the 5% mark following the data, after coming under pressure as the European Central Bank delivered a 25-basis-point rate hike while signaling an end to its rate-hike cycle.

All 11 major S&P 500 sectors advanced, with energy leading gains, up 1.2%.

Rising oil prices could keep inflation at elevated levels, analysts said, while persistent growth in prices of services kept alive the prospects of a November hike.

Traders see a 97% chance of the Federal Reserve holding rates in its Sept. 20 policy meeting and a near 61% likelihood of a pause in November, according to the CME FedWatch Tool.

Citigroup expects the Fed to hike interest rates by 25 basis points in November, compared with its previous forecast of a September hike.

At 9:38 a.m. ET, the Dow Jones Industrial Average was up 155.88 points, or 0.45%, at 34,731.41, the S&P 500 was up 23.03 points, or 0.52%, at 4,490.47, and the Nasdaq Composite was up 68.11 points, or 0.49%, at 13,881.69.

HP fell 3.7% after Warren Buffett's Berkshire Hathaway sold about 5.5 million shares of the company.

Visa slipped 3.3% after the payment processing giant said it was engaging with Class B shareholders on a proposal to convert their shares to Class C or Class A.

Advancing issues outnumbered decliners by a 7.41-to-1 ratio on the NYSE and by a 3.56-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and one new low, while the Nasdaq recorded 10 new highs and 42 new lows.