Famed investor Carl Icahn said Thursday's relief rally didn't change his negative view on the market.

"We keep our portfolio hedged," Icahn said on CNBC's "Closing Bell Overtime" Thursday. "I am still very, quite bearish on what is going to happen. A rally like this is of course very dramatic to say the least... but I still think we are in a bear market."

Stocks staged a huge comeback after October's reading of consumer prices fueled bets that inflation has peaked. The Dow Jones Industrial Average jumped 1,200 points for its biggest one-day gain since May 2020. The S&P 500 jumped 5.5% in its biggest rally since April 2020.

Big bear-market rally occurs often because of the large short interest built up in the downturn, Icahn said. While the inflation report showed some signs of easing, the founder and chairman of Icahn Enterprises believes price pressures are sticker than most think because of wage increases.

"Inflation is not going away, not in the near term," Icahn said. "We are going to have more wage inflation. A lot of people don't want to work."

The combination of higher interest rates and inverted yield curve leads Icahn to believe that a recession is inevitable, he said.

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