With yesterday's losses, the Dow and S&P 500 have now fallen more than 10 per cent from their peaks, meeting the official definition of a "correction" in financial parlance and marking an about-face from the bullishness of early 2018. "And what's interesting about this is it's primarily been driven by positive economic results, but that positivity has driven a likelihood for wage increases, which triggers concerns of inflation". They've been behind the curve and slow to raise rates. "That's a concern, and there's a lot of volatility and selling off in the stock market".
"The bond market has definitely got the stock market's attention", said Ryan Detrick, senior market strategist at LPL Financial.
"This is just some healthy, and overdue, volatility to wring out any excess", he said. "I'd characterize what we've seen over the a year ago as abnormal", said Sameer Samana, global equity and technical strategist at Wells Fargo Investment Institute in St. Louis.
In the U.S., however, the recent surge in equities has largely been thanks to volatile technology stocks, the kind of risky assets investors are now looking to dump.
Analysts suggest that Monday's rout was caused by fears that the era of cheap money was drawing to a close with renewed inflationary pressures.
"In January we talked about fear of missing out".
The retreat in equities had been long awaited by investors as the market climbed steadily to record high after record high with few bumps.
But the sell-off began last week after a solid USA jobs report fuelled expectations that the Federal Reserve will raise interest rates faster than expected.
Despite these large drops, the stock markets have been rising for about nine years now, and many analysts say it's time to hit the pause button.
The falls follow some good years for investors.
While Wall Street has been calling for a correction for some time, given the market's euphoric rise, the fall has been more violent and quicker than anticipated.
Higher interest rates push up borrowing costs for companies and individuals, which can hurt corporate profits and curb economic activity.