New York CNN Business  — 

Though stocks are slipping Wednesday after weak earnings from Target, the market has still enjoyed a stunning rally since the start of July — and it looks like greed is once again the predominant emotion on Wall Street.

The S&P 500 skyrocketed 9% last month and is up about another 3.5% since the beginning of August. Tech stocks are back in a bull market. The Nasdaq has rallied more than 20% from its lows of the year in mid-June.

Beyond major indexes and sectors, meme stocks are making waves again too. Struggling retailer Bed Bath & Beyond (BBBY) has soared thanks to a big investment from Ryan Cohen, the chairman of GameStop (GME), which is one of the original meme stocks that caught fire on Reddit last year.

Another sign of how frothy this market has suddenly become: Even shares of soccer (football for those readers outside the United States) club Manchester United (MANU) briefly popped after Tesla (TSLA) and SpaceX CEO Elon Musk jokingly tweeted that he was buying the team.

It’s silly season on Wall Street. With all this in mind, it should come as no surprise that the CNN Business Fear & Greed Index, which looks at seven gauges of market sentiment, recently edged back into moderate Greed territory. Just a month ago the index was showing signs of Fear, and it wasn’t far from Extreme Fear levels.

Tread cautiously

But investors now need to be careful.

Yes, some are hoping that inflation pressures are peaking and that the Federal Reserve will no longer need to raise interest rates as aggressively. Recession worries haven’t gone away, though. Some strategists fear the recent rebound has been a classic knee-jerk reaction.

“This isn’t the time to be a hero. The market rally has been overdue and welcome, but it’s too early to give an all-clear,” said Leo Grohowski, chief investment officer with BNY Mellon Wealth Management.

By way of one example, Grohowski said he’s neutral on tech stocks following their big move since July. Instead, he still likes consumer staples stocks (i.e. food and beverage companies) since they tend to hold up better in the event of a recession.

Other analysts are raising the alarm bells, highlighting that stocks have moved dramatically in such a short period of time.

“The market pendulum has aggressively shifted from pessimistic to optimistic over the past two months,” said Mark Hackett, chief of investment research with Nationwide, in a recent report. “Much of the decline and recovery were driven by investor emotion, which will likely keep volatility elevated until the macro picture becomes clearer.”

Grohowski is also not convinced the Fed will be able to relax its rate tightening just yet, either. That’s despite traders now pricing in about 50-50 odds of a half-point rate increase at the Fed’s September meeting versus another three-quarters of a point hike.

“Hopes for a Fed pivot are premature,” Grohowski said. “Inflation will be sticky and stubborn.”

Other market experts think investors should look for quality companies trading at reasonable prices instead of trying to make a bold call on the broader market.

“Looking at individual stocks, there are still a lot of good values,” said Steven Check, president and chief investment officer with Check Capital Management. Check likes (and owns) Warren Buffett’s Berkshire Hathaway (BRKB), real estate firm Brookfield Asset Management (BAM)and CarMax (KMX).