Key Highlights

● Strategists described the Fed decision as unsurprising.

● Stocks finished higher despite the hawkish tilt.

● Some strategists expect a December hike, others disagree.

● AI spending was seen as mattering more to markets than the Fed.

For Wall Street strategists, the Federal Reserve's decision was notable mainly for how unremarkable it was. Carson Group's Ryan Detrick told Reuters the Fed didn't throw any curveballs, since it was widely expected they'd hold, and the Fed left its benchmark rate range unchanged in a 10-2 vote, with two officials dissenting in favor of a hike.

The statement upgraded growth to strong and said inflation remains elevated, yet stocks finished modestly higher anyway, with the S&P 500 posting a third straight gain.

AI Spending Mattered More

Several strategists argued the Fed was not even the main event, with one framing the key question as whether AI expenditures are continuing, rather than what the Fed did. Another strategist said Oracle's reassurance moved the market more than the Fed did, pointing to Oracle's jump after its investor day set a fiscal 2030 revenue target.

Vertiv also soared on strong results and raised guidance, while the chip index rose for a fourth straight session, underscoring where investor attention was really focused.

Where Strategists Split on December

Where strategists split was on what comes next. Some expected a hawkish hold in October followed by one more hike at year-end, while others argued the Fed may well be one and done again this time around.

Traders lifted December hike odds after the decision, while some strategists noted the Fed has time on its side given growth remains strong and inflation, while elevated, has not spiraled.