Stock Market Losses: Normal and Expected
The changes to the stock market are a natural response to the Fed's anticipated interest rate hikes
Regarding the Stock Market Losses:
This is a natural consequence of people anticipating an interest rate rise: While obviously it does not make sense to buy bonds yet as their market value will decline when yields go up after the fed raises rates, people anticipate moving out of stocks and into bonds later and want to "beat the sell off." You obviously want to sell sometime before others do—but not too soon—-which causes the sell off to come some time before the actual rate hike itself. Far from being irrational pessimism, this is a natural response to the Fed's commitment to fight inflation later this year.
The thing to understand is there is a natural sort of tug-of-war between the bond market and the stock market. One tends to gain at the expense of the other. Of course, this is not the only factor involved in both markets, but there is an anti-correlation between them because as interest rates rise, owning a bond (as bonds get paid first) seems more enticing and as interest rates go down being paid "the remainder" in a dividend looks like the better deal.
So, I anticipate more losses this week. That said, I am not entirely sure when the market will level out.