The US stock market is about to enter its best six months in history, previously ignoring the popular Wall Street saying of "Sell in May and go away", maintaining its strong uptrend so far this year.

However, investors are still wondering if the stock market rally will run out of steam in the coming months with the increasing concerns over rising US Treasury yields and the upcoming presidential election.

Historically, in terms of stock market performance, the period from November to the following April is the best six-month window. CFRA Research's Chief Investment Strategist Sam Stovall stated that, compared to any other six-month window period since 1945,$S&P 500 Index (.SPX.US)$the average ROI during this period is the highest.

According to data compiled by CFRA Research, the average return of the S&P 500 index from November to the next April has been close to 7% since World War II, while the average performance during the remaining six months is only 2%.

But this year is different. According to Dow Jones Market Data, the S&P 500 index has risen by over 16% since April 30th, and is set to achieve the largest increase from May to October since 2009, building on a 20% growth from November last year to April this year.

Stovall wrote in a client report on Monday: "Double-digit returns have made investors doubt whether the market has run out of momentum and may enter a difficult period. History shows that this is not the case. Instead, previous strong trends usually mark the beginning of the period from November to the next April, although it is not guaranteed."

Since 1945, the S&P 500 index has risen by 10% or more 12 times between May and October, followed by an average stock market increase of 13% from November to the next April.

In addition, the S&P 500 index has achieved double-digit gains five times from November to the following April and from May to October, while the large-cap stock index has recorded positive returns four times from November to the following April, averaging an 11% increase. Stovall said this likely means the current progress is likely to continue further.

According to CFRA's data, this window from November to April is not only favorable for large cap stocks in the USA, but also for small cap stocks. $E-mini Russell 2000 Index (.US)$N/A.$MSCI EAFE Index (.MXEA.US)$The performance of the MSCI Emerging Markets Index has also "significantly outperformed the large cap".

It is certain that many investors are worried that the recent tension surrounding the US election may end the market rebound in the last two months of this year.

Last week, a sharp rise in US bond yields shook the stock market, with long-term US bond yields soaring to the highest level in nearly three months, as concerns grew that the new government - whether led by Republican Trump or Democrat Harris - could exacerbate the US government's fiscal deficit.

The 10-year US bond yield traded higher than 4.3% on Tuesday. In the past year, when it breaks through this key technical level, the stock market often goes through a difficult period.

Senior economist José Torres said: "The US stock market has risen by 23% so far this year, is there more room for growth? (s&p 500 index) Performing well in these 10 months, but still lagging behind the pace of recent years. In the first 10 months of 2023, 2021, 2019, and 2013, investors' roi was 24%, 27%, 29%, and 30% respectively."

Torres commented in an email on Tuesday that for the stock market to continue its upward trend, investors need to see "a red wave (Republicans win big), positive comments on AI during corporate earnings conference calls, easing economic data, and a calmer interest rate market."

Stovall stated in an interview that the stock market will continue to rise, surpassing its "well-known wall of worries." He mentioned that due to expectations of further interest rate cuts by the Federal Reserve and favorable economic data, stock prices will rise, "accompanied by a surge in technology company earnings."

Editor/Rocky