After several months of ebullience, the nation's stock and credit markets are coming back to reality.

Stock prices appear to have ceased their mighty climb which began more than two months ago.

Short-term interest rates, which fell dramatically from mid-April to mid-June, have levelled off and started to rise again.

Long-term interest rates also have stopped falling and have begun to rise anew.

None of this is bad. In the last year, market psychology has pushed interest rates and stock prices throgh wild gyrations that ignored underlying economics. "It's merely a reaction to a rally that went too far too fast," according to Robert Peck, who watches the bond markets for Merrill Lynch, Pierce Fenner & Smith.

In other words, the recent change in market behavior does not augur a renewed surge in interest rates and plunge in stock prices. Instead, the markets appear to be groping from something they have not seen in months: stability.

Admittedly, interest rates that stabilize at 10 percent are a long way from the 4 percent to 5 percent level that borrowers and lenders would have been comfortable with not so many years ago. Furthermore, if the Dow Jones Industrial Average slides back to about 850, as many analysts see likely, it still would be well below levels reached in the early 1970s.

Still, as investors seem to have shaken off the undue optimism that gripped them as fervently as pessimism had earlier in the year, the financial markets may be able to do a better job financing business and government borrowers than they have done in the last year. That is the main market role.

Nevertheless, a number of economic clouds remaining on the horizon could upset the search for stability:

The tax cut. Good comedians have a sense of timing. Politicians and economic policymakers should also but usually show a remarkable lack of it. Recently, most short-term economic policies offered from both sides of the aisle have been laughable.

President Carter waited until a serious recession was under way last March before launching a stringent program to cut back consumption. The program did little for inflation but insured that a bad recession would be worse.

Today, Republicans and many congressional Democrats are jousting over how best to cut taxes to stimulate the economy. Even the White House, whose earlier fixation on a balanced budget rivaled its monomania about the hostages, is bending. But a tax cut will not take effect until Jan. 1. By then the slide likely will be over.

While long-term tax code revisions are overdue, the proposed tax cut -- designed to fight the recession -- was needed last, January, not next January. It will add impetus to consumption at a time when that is not needed and will swell the size of the budget deficit.

Although there is more myth than reality about the role of budget deficits in inflation, they make investors nervous and less confident about the future.

Continued corporate bond financing. Corporations and local governments stayed out of the bond markets early this year because interest rates were high and investors shunned buying anything that locked them into an interest rate for more than six months, even when log rates were at historically high levels.

Now, with long-term rates higher than short-term rates -- but well below their levels of April -- companies are selling bonds again and using the proceeds to pay off their banks and other short-term lenders.

Investors flocked back to the bond markets in May and June. But they are becoming cautious again about buying bonds because the sharp decline in rates has made them wary about quailty. Borrowers, however, are continuing to rush to sell their bonds.

The long-term credit markets could become severely congested in the weeks to come, and companies could have trouble selling bonds. There is evidence that this already is occurring.

Heavy federal financing. As the economy continues to weaken -- although the worst of the recession may be past, it still has some time to run -- demands on the federal budget will climb at the same time that tax revenues decline (a tax cut would exacerbate the problem at least temporarily). Heavy federal financing will push up both short- and long-term rates.

Inflation. The consumer price index will get some needed relief in July and August when lower mortgage interest rates get factored into the index. But continued energy price rises, increasing labor costs and an anticipated jump in food costs will result in inflation numbers that are probably higher than many had anticipated a few months ago.

Inflation and higher interest rates go hand in hand. So do inflation and lower stock prices (although inflation is only one of several influences on both).

Monetary policy. Although the Federal Reserve Board concerns itself less with interest rates and more with monetary growth, and although weekly money supply figures are wildly erratic, investors and market participants still think in terms of old Fed policy. If the Federal Reserve continues to conduct its operations with a view to long-term money growth, the market psychology still will be influenced by short-term factors.

Fed-watching, which the central bank tried to reduce when it shifted its focus away from interest rates last October, will play a major role in market psychology. Psychology is important.

In short, the market's moves to ward stability could be undermined by a combination of economic and psychological factors. And the trauma of a strident fight at the Democratic convention, the rhetoric of a presidential comapaign and the uncertainties that the Anderson candidacy throw into the race will heighten the psychologcial difficulties.