People have been saying the fed rate hikes will bring down the market. So then the Fed indicates its highly likely there'll be a rate hike in March. The market soared!

Well those people are wrong. While a significant increase in long term interest rates would (most likely) bring down the market that's not the same as a rate hike.

A rate hike would be (1) only .25% which is not significant, (2) only directly affect short rates because it doesn't automatically mean the yield curve steepens and (3) would only happen if the economy improves.

It seems that every price of news, even if negative, is being spun into a positive by the markets. Something about this rally just seems irrational and doesn't sit right with me. What do you all think?

Low discount rates push up valuations. That's not irrational, but it is a factor that encourages bubbly behaviour. A lot of investors are being pushed out on the risk curve because they require higher yields, which causes riskier securities to be priced higher. That in turn leads to the problem that investors may not be properly compensated for the risk they take on.

But is it irrational to pay 25x earnings for Pepsico when bonds only yield 2%? Is it irrational to buy General Motors at 6x earnings and 4% dividend yield? And surely Wells Fargo at $60 is rich, but can we really definitively say it's overpriced?

So while I don't think US equities are irrationally priced now, the market does have significant risks in it. But when does it not? Look at the 1987 crash. That one just came out of nowhere.

Stick to a rational strategy. If you buy a US index fund today, you are not buying hot air. This isn't 1999. Same goes for most blue chips.