US STOCKS-Wall Street rises as traders temper bets on aggressive rate hikes

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* Weekly jobless claims unexpectedly rise

* GameStop gains on stock split

* Samsung results boost chipmakers

* Indexes up: Dow 0.93%, S&P 1.25%, Nasdaq 1.85% (Adds comment, updates prices)

By Amruta Khandekar and Bansari Mayur Kamdar

July 7 (Reuters) - Wall Street's main indexes rose on Thursday on expectations the U.S. Federal Reserve would ease the aggressive pace of interest rate hikes later this year amid growing concerns of a recession.

U.S. stock markets have stabilized in July after a brutal sell-off in the first half against the backdrop of a surge in inflation, the Ukraine conflict and the Fed's pivot away from easy-money policy.

The benchmark S&P 500 index has risen 2.8% so far this month, including session gains, after recording its steepest first-half percentage drop since 1970.

Minutes from the central bank's June policy meeting, where the Fed raised interest rates by three-quarters of a percentage point, showed on Wednesday a firm restatement of its intent to get prices under control.

However, Fed officials acknowledged the risk of rate increases having a "larger-than-anticipated" impact on economic growth and judged that an increase of 50 or 75 basis points would likely be appropriate at the policy meeting in July.

"The (rate hike) expectations for the July meeting haven't changed much, but the expectation later in the year is coming down a little bit," said Michelle Cluver, portfolio strategist at Global X ETFs

Though investors widely expect the Fed to hike rates by another 75 basis points in July, expectations of peak terminal rate next year have come down significantly amid growing worries of a global economic slowdown.

Fed funds futures traders are pricing for the benchmark rate to peak at 3.44% in March. Expectations before the June meeting were that it would increase to around 4% by May. It is currently 1.58%. .

Goldman Sachs forecast a 75 basis-point rate hike this month, a 50 basis-point hike in September, and 25 basis-point hikes in November and December.

A report on Thursday showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week and demand for labor is slowing with layoffs surging to a 16-month high in June.

A closely watched employment report on Friday is expected to show nonfarm payrolls likely increased by 268,000 jobs last month after rising by 390,000 in May.

At 12:07 p.m. ET, the Dow Jones Industrial Average was up 287.57 points, or 0.93%, at 31,325.25, the S&P 500 was up 48.06 points, or 1.25%, at 3,893.14, and the Nasdaq Composite was up 210.28 points, or 1.85%, at 11,572.13.

GameStop Corp rose 8.5% as the videogame retailer's board approved a four-for-one stock split.

Intel Corp, Nvidia Corp and Qualcomm Inc gained after South Korea's Samsung Electronics turned in its best second-quarter profit since 2018, driven by strong sales of memory chips.

The wider Philadelphia SE Semiconductor index climbed 4%.

Advancing issues outnumbered decliners by a 4.00-to-1 ratio on the NYSE and by a 3.53-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and 29 new lows, while the Nasdaq recorded 20 new highs and 44 new lows. (Reporting by Amruta Khandekar and Bansari Mayur Karmdar in Bengaluru; Additional reporting by Devik Jain, Editing by Shounak Dasgupta and Anil D'Silva)