The stock market is set up for a short-term rebound if fears about an economic downturn start to wane, according to investment firm Stifel. Stifel strategist Barry Bannister said in a note to clients on Monday that he sees the S & P 500 rising to 4,200 during the third quarter. That would be a gain of 8.7% from where the broad market index closed on Friday, and would be driven by investors gaining confidence in the U.S. economy, Bannister said. "We see a decline for oil, inflation and rate futures as well as avoidance of significant 2H22 S & P 500 EPS concerns supporting a P/E ratio-led rally in advance of our view that the Federal Reserve slows rate hikes and pauses rates by late-2022," Bannister wrote. "Recession fear is over-done, and we see no U.S. recession in 6-9 months. Although we believe a Secular Bear Market began in 2022, those feature trading opportunities for a decade, such as the one we now see," he added. Bannister's call stands out, since others on Wall Street have recently turned more bearish. Bank of America's Savita Subramanian said last week that the S & P 500 would finish the year at 3,600 , and could dip below that at some point in 2022. The S & P 500 has fallen 19% year to date, as inflation has pushed to 40-year highs and as the Federal Reserve has lifted interest rates. Investors have also been rattled by the inversion of the yield curve, with short-term yields trading above longer-term counterparts at several key points. However, Bannister said that shouldn't affect stocks in coming months. "Much ado about curve inversion, but that is a long lead indicator and does not point to recession anytime soon," Bannister wrote. Stifel said that cyclical growth stocks, such as software and semiconductors, should lead the third quarter rally as investors add exposure to growth names. — CNBC's Michael Bloom contributed to this report.