Alex Wong/Getty Images

Wall Street never thought it would be this bad.

Over the last two months, and particularly over the last two weeks, investors have been exiting their bond investments with unexpected ferocity, moves that continued through Monday.

A bond sell-off has been anticipated for years, given the long run of popularity that corporate and government bonds have enjoyed. But most strategists expected that investors would slowly transfer out of bonds, allowing interest rates to slowly drift up.

Instead, since the Federal Reserve chairman, Ben S. Bernanke, recently suggested that the strength of the economic recovery might allow the Fed to slow down its bond-buying program, waves of selling have convulsed the markets.

The recent pain has spilled over into stock markets, pushing the Standard & Poor’s 500-stock index down an additional 1.2 percent on Monday. But the real pressure has been felt in the bigger and more closely watched bond market. The value of outstanding United States government 10-year notes has fallen 10 percent since a high in early May.

The selling has been most visible among retail investors, who have sold a record $48 billion worth of shares in bond mutual funds so far in June, according to the data company TrimTabs. But hedge funds and other big institutional investors have also been closing out positions or stepping back from the bond market.

“The feeling you are getting out there is that people are selling first and asking questions later,” said Hans Humes, chief executive of the hedge fund Greylock Capital.

The anxiety has been heightened by recent instability in the Chinese banking sector, where lending has shown signs of freezing up. That led Chinese stocks down particularly sharply, with the Shanghai composite index ending Monday down 5.3 percent.

But Mr. Humes and many others in the market say they think that the recent swings are driven more by fear than by a rational assessment of what bonds are worth. This could lead to crises for some big investors who took speculative bets, but it makes many analysts skeptical that the panic will lead to any broader instability in the financial system.

“The fundamental story is not so bad — you are not talking about the system teetering on the edge of anything,” Mr. Humes said.

Brendan McDermid/Reuters

It was the strength of the underlying economy that Mr. Bernanke emphasized last Wednesday at a news conference where he explained the central bank’s impulse to pull back on its $85 billion a month bond-buying program.

The money the Fed spends on bonds is supposed to bolster the economy, but the cheap money coming from the Fed has also made it less expensive and easier for investors to make large, increasingly speculative bets on bond prices.

The Fed’s unusual bond purchases have given it far more influence over the market than at past turning points for interest rates. But Fed officials are clearly unhappy with the extent of the reaction to Mr. Bernanke’s statements. On Monday, some top Fed officials made public comments that appeared to be aimed at calming some of the market’s wild selling. Narayana Kocherlakota, the president of the regional Fed branch in Minnesota, said in a statement on the bank’s Web site that the Fed’s recent communications had left the “public with large amounts of residual uncertainty.”

Mr. Kocherlakota emphasized that the Fed still planned to support the economy until it grew significantly stronger.

The recent rout follows several years of generally falling interest rates and comfortable bond returns. The belief that the Fed was likely to maintain its stimulus into the foreseeable future caused many investors to continue piling into bonds, even through the first few months of this year. TrimTabs estimates that $1.2 trillion flowed into bond funds over the last four years.

But those good times bred complacency, and Mr. Bernanke’s recent comments have caused an abrupt change in perceptions.

The S.& P. 500 recovered from large losses early in the day to finish down 19.34 points, to 1,573.09, on Monday. The Dow Jones industrial average fell 0.9 percent, or 139.84 points, to 14,659.56. The Nasdaq composite index dropped 1.1 percent, or 36.49 points, to 3,320.76.

In the current fear-soaked atmosphere, market participants are looking over their shoulders, seeking to identify which firms or funds are sitting on big losses and might be forced to sell large lots of bonds. The most obvious contenders are those that bought bonds with borrowed money. In Wall Street parlance, that is called leverage. It can magnify returns when rates are low and prices are rising, but unwinding leveraged trades can deepen losses.

“The fact that we’re seeing these violent moves is a reflection that there was leverage there,” George Goncalves, a fixed-income strategist at Nomura, said. “This is definitely more than a hissy fit. Some people are being forced to sell.”

Usually the preserve of banks and hedge funds, leverage even spread into retail-focused bond funds in recent years when rates were at very low levels. Since 2008, about one-fifth of the exchange-traded funds that invest in longer-term bonds were leveraged, according to Savita Subramanian, an equity strategist at Bank of America Merrill Lynch.

The signs of stress have also been evident in the more ordinary exchange-traded funds, or E.T.F.’s, that hold bonds. These E.T.F.’s are very easy to sell at moments of panic, but the operators of the E.T.F.’s have found it harder to sell off the actual bonds. This has caused the value of the E.T.F.’s to sink further than the value of the underlying bonds.

On Friday, a municipal bond E.T.F. that is popular with retail investors fell 3.7 percent below the value of the bonds it was supposed to be holding, the so-called net asset value, according to ETF Global. On average over the last two months, the E.T.F., which trades under the ticker symbol MUB, was only 0.6 percent below the value of its net asset value.

“It’s a self-fulfilling cycle until everyone gets exhausted,” said Peter Tchir, the founder of TF Market Advisors. “We don’t think we’ve seen the capitulation we need to hit bottom yet.”