Wharton School finance professor Jeremy Siegel is predicting a difficult time ahead for the stock market.
With all the good news on earnings already priced into equities, rising interest rates are now a "major impediment" for the fourth quarter, he told CNBC on Monday.
"It's psychology. Look at all the potential negatives," he said.
That includes the U.S. government deficit of $800 billion and the Federal Reserve selling Treasury bonds as it unwinds it balance sheet, he noted. Plus, the Chinese haven't been buying Treasurys, he added.
When faced with these types of factors with low rates, investors thought they could "relax," said Siegel. Now they are concerned it may be a problem for equities and bonds.
"That sort of psychology is going to creep into the decisions that's going to make this quarter a difficult one," Siegel said.
"Not a bear market, It's just that the good news is out there [in the market]. I don't see any more ... good news," he added. "I see potential risks."
However, Siegel said on a long-term basis the market isn't overvalued, it just has to digest the news of a higher interest rate scenario.
Therefore, in the end, the stock sell-off is healthy, he pointed out.
"You want these corrections that cleanse the excesses and then move in on value [stocks]," Siegel said.