NEW YORK After big gains for the U.S. stock market this year, equity valuations could come under pressure from high interest rates, based on historical relationships, JPMorgan strategists said on Tuesday.

The S&P 500 is up 16% so far this year, but many investors are concerned the index has become too expensive, especially as Treasury yields have climbed.

According to JPMorgan equity strategists, the current real rate implies a forward price-to-earnings (P/E) ratio of around 15 times to 16 times, based on data since 1982, versus its current ratio of about 20 times.

"Equities are up 16% YTD mostly on multiple expansion while real rates and cost of capital are moving deeper into restrictive territory," JPMorgan equity strategists said in a note. "History suggests this relationship is becoming increasingly unsustainable, posing risk to the equity

multiple."

JPMorgan looked at another metric, which compares P/E ratios to long-term expected earnings growth, and found equities are overvalued by 14%.

The strategists said the "unsustainable" level of global debt combined with "a credible rise in inflation risk" had contributed to a sharp move higher in long-term rates.

"This is another negative for an already stretched equity multiple, especially since a meaningful portion of the move may be associated with non-growth/supply forces," the strategists said.

(Reporting by Lewis Krauskopf; Editing by Jamie Freed)