The S&P 500's performance after Federal Reserve rate cuts varies significantly depending on whether the economy is in a recession. During recessions, the S&P 500 typically declines, while in 'growth scare' or 'normalization' periods, it tends to rally. The SPDR S&P 500 ETF Trust (SPY) reflects these trends, gaining in non-recessionary periods and declining during recessions. Volatility and bond yields also react differently based on the economic context.