How can excess stress cause absent-mindedness?
The compounding effects of the Sympathetic Nervous System in action can negatively impact cognitive function, including memory. Stress is a big component in the triggering of a Sympathetic Nervous System response.
One way this can happen is through the lens of the Sympathetic vs the Parasympathetic Nervous Systems.
The Autonomic Nervous System is a part of the nervous system and regulates involuntary functions of the body, such as heart rate, enzyme release, and the like. There are two parts to it:
The Sympathetic Nervous System is in charge when the body is under stress or assault - it raises heart rate and blood pressure, shifts energy to muscles to prepare for defending oneself (or running - thus the "flight or fight response"), alters digestion so that energy is taken from ready sources, etc.
The Parasympathetic Nervous System is in charge when the body isn't under stress or assault - it lowers heart rate and blood pressure, works to regulate digestion, looks to heal the body, etc.
And it really is very much like a switch, where an increase in stress (and or a decrease in the ability to withstand stress) will switch the body into a stress response and into the Sympathetic Nervous System.
As a body experiences more and more stress, it stays longer and longer in the Sympathetic Nervous System, disrupting sleep, creating anxiety, and other conditions - all on the body's premise that there is an immediate threat to health and/or safety and that being alert is more important than rest and recuperation.
And so the compounding effects of lack of energy sent to the memory centres of the brain, loss of sleep, feelings of anxiety, the desire of fight/flight, and all the other effects will negatively impact memory and cognitive function in general.