Every midterm election since 1946 has meant one thing for stocks

So far, markets are ignoring midterm election uncertainty and the potential outcomes for the remaining years of Trump's presidency.

There are probably two reasons for this.

First, markets have historically performed quite well in the year after midterm elections.

Every midterm election year since 1946 has been followed by positive one-year stock returns, Truist chief strategist Keith Lerner pointed out (see chart below). The biggest gain after a midterm election year was in 1954, at 34%.

The average one-year gain has tallied 14.4%.

"With the S&P 500 roughly flat since June, the market has loosely followed the historically choppy midterm-election pattern," Lerner added. "The seasonal backdrop becomes more constructive as we head deeper into the fourth quarter. Since 1950, the S&P 500 has gained an average of 6.6% during the fourth quarter of midterm-election years and advanced 84% of the time."

Second, this midterm election season arrives as corporate America is enjoying a record-setting profit run.

The S&P 500 ( ^GSPC ) is expected to report year-over-year earnings growth of 29.5% for the recently completed third quarter.

If that holds true, it will mark the third consecutive quarter of earnings growth above 25%, according to FactSet. It would also represent the eighth straight quarter of double-digit percentage earnings growth.

For the fourth quarter, Wall Street analysts are calling for earnings growth of 27.6%.

Analysts are predicting year-over-year earnings growth of 32.4% for 2026 when all is said and done.

To be sure, a lot has been thrown at the market in the past month ahead of the midterm elections. Resurgent oil and gas prices are weighing on consumer sentiment. A global rise in bond yields is raising the cost of capital for consumers and businesses.

But there are a lot of positive scenarios for stocks post-midterms, Wall Street pros think.

"For US equities, we think seasonality should turn supportive from October, with uncertainty providing scope for a near-term move lower if Democrats outperform," the strategy team at Morgan Stanley said in a note. "The type of majority matters more than which party wins from an equity market perspective: we think a 'cohesive' Democratic majority can use must-pass legislation as leverage to defer OBBBA-related cuts, with implications for consumer/healthcare stocks. On rates, only deficits larger than investors expect should move the curve. Unified Republican control is the one result keeping a party-line reconciliation bill available and is the main upside risk. A divided government brings the least supply pressure and rate vol, but also the least USD support and clearest downside risk to growth."