How to reduce AC sine wave noise
Seems like you are seeing noise from the switching power supply, since 400kHz is a plausible switching frequency. As well as bypassing the output you can try connecting capacitors across the input to output. 

A simple RC low-pass filter will get rid of most of it at your scope without affecting the millisecond-level rise time of the sensor appreciably. 

If you are curious as to why (real) 400kHz noise would show up as a (not real) 1kHz sine wave, it is because of a phenomenon known as aliasing.