History Offers a Bullish Case for Stocks After Midterms - 9 S&P 500 Picks to Watch

• The markets largely welcomed the Democrats’ victory in Wednesday’s midterms
• The S&P 500, on average, gains 15% in the six months following the midterms
• Which S&P 500 stocks offer the greatest potential right now?

Wall Street rallied on Wednesday as Democrats secured sweeping victories in the US midterm elections, gaining control of both the House of Representatives and the Senate. The Dow Jones surged nearly 1,600 points, or about 3%, marking its biggest one-day gain of the year.

The S&P 500 rose 1.58%, recording its second-best post-midterm election performance in a single session since 1982.

The session had begun on a weaker note, with US equity futures falling sharply overnight from Tuesday into Wednesday as election results emerged, before staging a recovery.

In practical terms, the scale of the Democratic victory is unlikely to bring major policy changes in the short term. The party lacks the Senate majority needed to overcome a filibuster, while Donald Trump retains his veto power. Nevertheless, investors welcomed the removal of electoral uncertainty and the prospect of a legislative stalemate.

Among the biggest movers on Wednesday, Apple climbed 6% to reach a new all-time high. By contrast, Trump Media & Technology plunged nearly 25%, while Tesla fell 3.3%.

The key question now is whether the rally can continue or will prove to be a one-day reaction.

Historical data offers some encouragement. The S&P 500 has gained an average of 15.5% in the six months following the last 14 midterm elections since 1970.

However, this historical pattern should be treated with caution. In 2018, when Democrats regained control of the House during Trump’s first term, the S&P 500 rose 2.1% the day after the election, before falling 1.2% over the following week and 2.2% over the month. Historical averages offer no guarantees, and individual stocks are likely to respond differently to the political and economic backdrop.

Midterms: These S&P 500 Stocks Have the Most Potential to Benefit from the Post-Election Effect

To identify the stocks best positioned to benefit from this seasonal trend, we focused on companies that meet two key criteria.

First, attractive valuations, assessed using InvestingPro’s Fair Value, which combines several recognized valuation models.

Second, analyst confidence, measured by the average analyst price target. We also applied a financial health filter to exclude companies that may be more vulnerable if market volatility returns.

We therefore turned to the Investing.com screener to identify S&P 500 stocks that meet the following criteria:

• Inclusion in the S&P 500 index
• Upside potential of more than 25% according to InvestingPro Fair Value
• Upside potential of more than 25% based on the average analyst target price
• InvestingPro Financial Health Score greater than 2.5/5

This search allowed us to identify 9 stocks:

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Specifically, these S&P 500 stocks show upside potential ranging from +27.6% to +69.5% based on Fair Value and from +28% to +96.4% based on analyst consensus.

Among these stocks are:

• Broadcom (AVGO), which designs custom chips and network components for the data centers of AI giants, in addition to its infrastructure software. The company reported its third-quarter results for fiscal year 2026 in early September. Revenue reached $29.6 billion, up 86% year-over-year, and adjusted EPS came in at $3.32, above the expected $3.22. Sales of AI-specific semiconductors more than tripled to $16.7 billion, and management is targeting approximately $115 billion in AI revenue as early as fiscal year 2027. The fair value is 40% above the current share price, and the average analyst target implies upside potential of 61.9%. The stock thus stands out as a serious candidate for a potential post-midterm rally, provided investors are willing to accept the volatility typical of AI-related stocks.
• Uber Technologies (UBER), which is no longer limited to ride-hailing. The platform now encompasses mobility, delivery, and freight, and strengthened its delivery division this summer with the acquisition of the German company Delivery Hero for $14.8 billion. Its third-quarter results, released on November 4, confirm this momentum. Gross bookings rose 20% to $59.8 billion, marking the fifth consecutive quarter above this growth rate. Adjusted EPS came in at $0.88, up 35%, at the top of the range announced by the company. This consumption-sensitive growth profile can benefit from a favorable market environment. The stock is trading 27.6% below its Fair Value, and analysts estimate it has upside potential of 44.2%. However, the heavy investments announced in autonomous driving remain a point of concern.

That said, the other stocks on the list show more attractive upside potential based on Fair Value.

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.