To achieve high-precision residual stress detection in key components in precision manufacturing, an electro-optic modulated ellipsometric stress sensing system has been established. This study focused on the ellipsometric signal response of common 304 stainless-steel materials in engineering under uniaxial tensile stress conditions. Firstly, based on the fundamental principles of reflection ellipsometry, the relationship between the ellipsometric signal and the ordinary and extraordinary refractive indices was established for different optical axis directions. Secondly, the working point of ellipsometric stress sensing was optimized for stainless steel materials. By comparing the ellipsometric signals at the extinction point and the non-zero linear working point, it was demonstrated that the non-zero linear condition is suitable for stress signal sensing. Finally, the stress-induced ellipsometric signals were measured under different optical axis directions. The experimental results indicate that for 304 stainless steel, the system's minimum stress detection limit is 7.84 kPa, and the stress detection accuracy of the system is better than 7.84 kPa. This system can be utilized for high-precision stress detection requirements in metal workpieces in precision manufacturing.