Due to concerns about the weakening of the US economy triggering a global market sell-off, the US stock market experienced its worst day since 2022 on Monday, followed by a rebound on Tuesday.

However, Barry Bannister, chief stock strategist at Stifel, said it's still too early to return to the US stock market, reiterating his view that the S&P 500 index will fall to 5000 points in October.

Stifel's team of strategists led by Bannister said in a report on Monday:" Our view is still that the S&P 500 index will fall to 5000 points in October, down 12% from its July peak, due to a significant slowdown in the US economy and stubborn inflation."

They wrote:" While we are describing a low double-digit correction, the risk of entering a bear market exists if the economic slowdown evolves into a recession. From history and definition, an economic recession would surprise investors and the Fed."

Market corrections typically occur when stock indexes fall at least 10% from recent bull market highs. Some corrections can worsen into bear markets, typically involving indexes falling at least 20% from recent peaks.

The S&P 500 index last entered the correction zone on October 27, 2023, but the recent market sell-offs have pushed the benchmark index to the edge of another correction. According to Dow Jones market data, the S&P 500 index is down 7.5% from its recent closing high of 5667 points on July 16.

Bannister had previously predicted a sell-off in the summer and has repeatedly reiterated his view that there will be a market correction in October.

His forecast has made him one of the few consistent bears on Wall Street, as most other market strategists are bullish and have raised their year-end target prices for the S&P 500 index, citing hopes for multiple Fed rate cuts later this year.

Bannister and his team suggest investors stay "defensively positioned" and expect "defensive value" sectors such as medical care, consumer staples and utilities to outperform the S&P 500 index in the second half of 2024 if inflation remains stubborn and US GDP growth slows significantly.

Strategists said these sectors are less sensitive to economic activity and therefore more attractive to investors worried about a recession.

According to FactSet data, the US stock market closed higher on Tuesday, with the S&P 500 and Nasdaq Composite each up more than 1% and the Dow Jones Industrial Average up 0.8%.