In other words, the market is trying to learn from its mistakes. We were caught off guard by the Brexit vote and Trump’s victory, so now, we’re seeing relatively large moves as traders’ collective desire to avoid the pitfalls of underestimating the probability of a tail event is manifest in the amplification of tiny blips in poll numbers.
How can a market “take into consideration all potential future events”? Obviously it can’t. That’s absurd. That said, stocks should be expected to discount what we might call “known unknowns.” That is, events that we know are likely to cause turbulence but that also admit of some indeterminacy regarding outcomes. Things that would fall into that category include the French elections and US tax reform.