The market's bounce off the July lows could have further to go as inflation pressures start easing, Stifel's Barry Bannister said. The firm's chief equity strategist hiked his year-end S & P 500 target to 4,400 from 4,200. The new target implies upside of 6% from Thursday's close "Cyclical Growth… has a strong relief rally as inflation slows, Fed expectations are pulled back, and the economy has the balance sheet and momentum in 2022 to mitigate recession risk," the chief equity strategist wrote in a note. The S & P 500 is up about 14% from its June 17 low of 3,636.87. However, it's still down roughly 13% for the year. Bannister listed a number of factors for his target hike. For one, the S & P 500's sell-off in the first half is still being reversed. The index also discounts negative year-over-year S & P per-share earnings in 2022, "but we see 2022 EPS holding its own," he said. In addition, fed funds futures — which tracks market expectations for where Federal Reserve rates will be — have peaked, he wrote. That puts a top in for the 10-year Treasury inflation-protected securities (TIPS) real yield, which is bullish for the S & P 500 price-earnings ratio, Bannister said. He also sees valuation risks dropping. As for a potential recession, he's not worried. "Inflation is likely to sharply decline soon in a (highly unusual, COVID policy-shaped) non-recession slowdown," Bannister said. To be sure, there are some risks to his thesis, including an oil shock resulting from the Russia/Ukraine war and a change in financial conditions. "This rally requires cooperative Financial Conditions (FCI), so for risk we watch for any catalyst that tightens FCI (lowers P/E)," Bannister wrote. How to play it In this environment, Bannister prefers cyclical growth stocks in sectors such as software, media and entertainment, tech hardware, retail and semiconductors. Notable names in those groups include tech heavyweights Microsoft , Alphabet , Apple , Amazon and chips giant Nvidia . Other stocks that fit the bill are Visa , Meta , Cisco , Broadcom and Home Depot .