After falling to a 16-month low in May, the U.S. dollar is once again rising against major currencies as Federal Reserve officials this week indicated a June interest rate rise would be “appropriate” given the steady improvement in the labor market and rise in inflation.

The minutes of the Fed’s April policy meeting published on Wednesday indicated most policymakers felt a rate increase could be needed in June, while New York Fed Chief William Dudley on Thursday reinforced comments from other Fed policymakers this week suggesting rate rises may come as soon as June or July.

U.S. inflation rose by the most in more than three years in April, while unemployment is near what most economists consider full employment.

As a result the U.S. dollar is up 2.9% against a basket of currencies since hitting its low on May 2, a rise that could impact U.S. corporate earnings.

Companies such as Whirpool (WHR), Johnson & Johnson (JNJ) and Xerox (XRX) had only just beaten analyst estimates in the first quarter thanks to the reduced drag on export earnings from the dollar’s first quarter weakness.

“If we don’t have that dollar support then it starts to get ugly,” said Dubravko Lakos-Bujas, U.S. equity strategist at J.P. Morgan Chase. “The reason why the market got excited over the last few months was the dovish Fed. But if the Fed now starts to hike that means the dollar will go higher and it will put renewed pressure on oil and the emerging markets.”

A strengthening of the dollar would likely cut U.S. earnings by about 1% for the year, he said.

Overall, 40% of North American companies said the strong dollar was weighing on their businesses in the fourth quarter of 2015, according to research firm FireApps.

The average hit among companies that put a dollar figure on the impact was $217 million, slicing an average of $0.07 from earnings per share.

The renewed strengthening of the dollar in recent weeks comes at a time when U.S. stocks trade at expensive valuations, prompting some investors to reduce their holdings of energy, industrial, and technology companies that get a significant part of their revenues overseas.

“A stronger dollar is going to put more downward pressure on industrial names and larger cap companies that are more global to begin with,” said Chris Retzler, a portfolio manager at Needham Funds who suggested that he was shorting the U.S. market. “At the same time the Fed is adding more uncertainty, which is what equity investors hate more than anything.”

International sales account for 48% of S&P 500 (SPX) company revenues, according to S&P Capital IQ.

At 84.4%, Micron Technology (MU) gets more of its revenues overseas than any other company in the index, followed by Nvidia (NVDA) at 83% and SanDisk (SNDK) at 83%. Security company Allegion (ALLE) depends on international sales for 81% of revenue, the highest percentage of any company outside of the tech sector.

Terri Spath, chief investment officer at Santa Monica-based Sierra Investment Management, said the likelihood of a stronger dollar is prompting her to put new investor dollars into municipal bonds and other assets that do not rise and fall based on currency fluctuations. At the same time, she has no exposure to U.S. stocks at the moment.

“Regardless of what the Fed does, the U.S. is about as expensive a market as you can find,” she said. “This only creates more risks to the downside.”