Special Reportfull coverage America's cheapest gas is in this town Summer drivers to get a break on gas Why gas prices are likely to keep climbing You'll pay a little less for gas this summer Expect relief from record February gas prices Why gas prices are rising

NEW YORK (CNN/Money) - The way the stock market's been acting lately, you'd almost think a second-half rally was all but a done deal.

But while there have been some positive signs of late -- a solid start to second-quarter earnings, companies with lots of cash and investor resilience in the face of the London terrorist attack and record oil prices -- there are plenty of reasons to remain wary.

• The stock market seems to be counting on the Federal Reserve to stop or at least take a break from its interest-rate hiking campaign soon but that may not happen
• $60-plus oil hasn't upset investors yet but that doesn't mean it won't
• The impact of the rising dollar may be more substantial than investors have expected, which could dent earnings. Regardless, earnings growth is set to slow this year

At its June meeting, the Fed boosted the fed funds rate, an overnight bank lending rate, by a quarter-percentage point to 3.25 percent -- the ninth consecutive rate hike since the central bank began raising short-term rates last summer.

The stock market seems to be betting the Fed will boost rates another quarter-point in August and then take a breather -- at least for awhile. Breather boosters point to recent mixed readings on the economy and inflation that seems well contained.

"We think 3.5 percent is a good point for the Fed to take a break to measure the economy and the impact of its rate hikes," said Barry Hyman, stock strategist at Ehrenkrantz King Nussbaum. "If the economy does appear to be picking up, they could start raising again."

Influential bond fund manager Bill Gross has even suggested the Fed may start lowering rates by the end of the year.

The stock market would welcome a break from rising rates, which tend, in the long run, to slow the economy and cut into corporate profits.

But there was nothing in the most recent Fed move and statement to suggest that the central bank's policy-makers are about to pause anytime soon.

Why might the central bank keep raising rates? To combat persistently higher oil prices, which can be inflationary -- and to cool off the red-hot housing market, which doesn't look like it's going to lose steam until at least next year, according to a recent Mortgage Bankers Association report.

A recent research report from Wells Fargo economist Michael Swanson showed that since 1984, once the Fed took on a change in its policy stance, it tended to ultimately either raise or cut the fed funds rate target by 3.75 percent, on average.

So far it's raised the rate just 2.25 percent.

While that pattern may not hold, Swanson noted that falling unemployment and solid consumer spending -- which continues to outpace inflation -- make it unlikely the Fed will be through so soon.

Worries about rising oil prices have weighed on the market for some time, since higher energy prices raise costs for businesses and can cut into consumer spending, which fuels two-thirds of the nation's economy.

But while crude oil has been trading near record highs the last week or so, stocks have barely reacted. That's been the case more and more over the last few weeks.

That may be because investors have already factored in oil at roughly $60 a barrel. Or it may be that investors have realized that oil at these levels does not mean a return to the 1970s, when soaring oil prices crippled the economy.

Economists -- while debating whether crude could hit $100 a barrel or start to slump -- seem to agree that as long as oil doesn't rise too much from current levels, it's unlikely to have a huge negative effect on economic growth.

Still, as far as stocks go, it could put a crimp in the little party investors were planning for the second half.

"It's not causing a sell-off like it has in the past, but it does make it unlikely the market can move a lot higher," said Timothy Ghriskey, chief investment officer at Solaris Asset Management.

Alcoa and other upbeat early reports notwithstanding, the second-quarter is on track to show the slowest earnings growth in three years. And while profit growth is expected to accelerate in the second half from the recently ended quarter, it will still be slower than a year ago.

This deceleration partly relates to tough comparisons to a year ago and to the fact that oil prices and the dollar have been rising. In particular, the rise in the dollar in 2005 after its slide over the last few years could be a factor for big corporations that do a lot of business overseas.

These companies have benefited from a weaker dollar, which makes their products more competitive internationally. And the dollar's up at least 10 percent this year.

"Historically, S&P 500 earnings growth, on average, has been negative when the dollar has appreciated 10 percent or more in a 12-month period," Richard Bernstein, chief U.S. strategist at Merrill Lynch, told analysts and investors in a recent conference call.

Bernstein also noted that Merrill expects a wave of downward revisions to profit forecasts later this year as analysts get less bullish on some of the "cyclical stocks" -- such as home builders, steel producers, tech and other companies whose fortunes are tied to economic growth -- that have performed well this year.