NEW YORK, May 4 Reuters The end of a marketpunishing rate hiking cycle may be in sight, but uncertainty over stock valuations and the economic outlook is keeping investors on alert for more turbulence ahead.

The Federal Reserve on Wednesday signaled it may pause interest rate increases after raising rates by 500 basis points over the last 14 months to fight inflation in its most aggressive monetary policy tightening since the 1980s.

In theory, that should be welcome news for stocks and other socalled risk assets, which wilted under the barrage of hikes last year. Yet some investors worry this year39;s 6.5 rebound in the SP 500 has made equities expensive. Many are also wary that the Fed39;s rate hikes may precipitate a recession later this year.

The Fed getting ready to move to the sidelines is one step but it won39;t be a cure all, said Angelo Kourkafas, an investment strategist at Edward Jones.

Stocks fell on Wednesday, with the SP 500 ending down 0.7, after the Fed39;s latest policy decision in which the central bank also raised rates by 25 basis points, as markets expected.

Still, equities have risen in recent weeks, with the SP 500 up 6 since midMarch despite a tumult in U.S. regional banks and worries over a looming showdown over raising the countrys debt limit.

The gains pushed the SP 50039;s forward pricetoearnings ratio up to 18.2 times, compared with a historic average PE of 15.6 times, according to Refinitiv Datastream a level some investors say may be…