My oldest DD was 3.5 when other DD came along. She kind of understood it but I don't think they can really grasp it until the sibling arrives. I'd say the reaction is quite normal.
A 3 yr rules the house, owns everything & competes for nothing. Now the tables r being turned...in their eyes.
Make them feel like they are a part of every step. Buying clothes, they can help pick, new car seat, color in a bedroom etc etc.
Also after the baby arrives do special one on one things with them so they know that special bond is still there & even stronger.