STORY: Wall Street rallied on Thursday with the Dow and S&P 500 hitting new intraday highs, after the Federal Reserve kicked off its easing cycle with a super-sized half percentage-point rate cut.

The Nasdaq spiked, climbing nearly 3% at one point in morning trading.

After announcing the larger 50-basis-point cut on Wednesday, the Fed also laid out plans for future rate cuts and unveiled projections that could reflect a goldilocks scenario, where growth is steady and inflation and unemployment stay low.

That bodes well for stocks, says Eric Diton, president and managing director of The Wealth Alliance.

"You look historically, three months out from the first Fed cut, the S&P's up [a] median [of] 6.4%. It's 9.8% if you go out six months, and if you go out one year, it's north of 15%. So, historically, this is the beginning of a bullish time."

Rate-sensitive growth stocks that have led much of this year's rally all gained, including Microsoft, Tesla, Apple and AI chip leader Nvidia.

The small cap Russell 2000 index also rose, and Diton said that should continue as rates come down further.

"They've got more debt than large companies on average. And so if you've got more debt, and you're going to be able to repay some of that debt down the road, and borrow at lower rates, well that is great for you."

Traders now see a 63% chance that the central bank will lower interest rates by a quarter percentage-point at its November meeting, per the CME Group's FedWatch tool.