In mid-August, Stifel Nicolaus & Co.’s top equity strategist Barry Bannister went from the biggest bear on U.S. equities to its biggest bull. It might have been too soon, he says.

“We definitely pulled the trigger too early and it looks like it’s catching up to us,” Bannister said in a phone interview with Bloomberg News today. “There is a real issue of global deflationary pressures, and the hysteria around Ebola and the Middle East isn’t helping.”

Bannister had long been one of the most pessimistic strategists on Wall Street, starting the year with a forecast that the Standard & Poor’s 500 Index would be at 1,850 by December. As stocks steadily climbed, he made about-face in August and changed his estimate to 2,300, higher than any of the other 19 strategists tracked by Bloomberg.

While it’s not unheard of for the stock market to surge in the fourth quarter, Bannister’s current forecast implies a 26 percent rally in two and a half months. He said he’s sticking to his year-end target and the recent pullback is normal for a market that hasn’t seen a 10 percent drop for three years.

“The global leading economic indicators have dipped, but they’re nowhere near where we were in past major economic downturns,” Bannister said, adding that he’s working on a note to clients now. “We raised our target too early but that doesn’t mean we don’t expect a year-end rally.”

Stocks Tumble

U.S. stocks tumbled today, with the S&P 500 wiping out gains for the year. Banks led losses after reporting earnings, a drop in retail sales reignited concern about the economy and a second health worker in Texas caught Ebola. The S&P 500 lost 2.1 percent to 1,837.85 as of 2:25 p.m. in New York.

The equity benchmark has fallen 8.9 percent since its record on Sept. 18, approaching a 10 percent decline known as a correction. The Chicago Board Options Exchange Volatility Index, the benchmark gauge of options prices known as the VIX, jumped 30 percent today to 29.53, the highest level since 2011.

Economic reports today showed U.S. wholesale prices unexpectedly fell in September for the first time in a year, propelled by a drop in fuel costs. Oil has entered a bear market as shale supplies boost U.S. output to the most in almost 30 years. The largest OPEC producers are responding by cutting prices, sparking speculation that they will compete for market share rather than reduce supply.

Improving earnings growth will help U.S. stocks rebound from the recent selloff, Bannister said. More than 50 S&P 500 companies are releasing results this week, according to data compiled by Bloomberg. Profit for the members of the index probably rose 4.8 percent in the third quarter and sales increased 4.2 percent, analysts projected.

“Earnings look like they’ll be pretty good and if guidance doesn’t come in weak, we can probably look at the fourth quarter and next year as OK,” he said.