The collapse of technology-stock prices after the Nasdaq peak in March 2000 is commonly called the dot-com crash.
The Nasdaq Composite reached 5,048.62 on March 10, 2000, after years of enthusiasm for internet businesses. Many companies had little revenue or no profits, yet investors assigned them extremely high valuations based on expected future growth.
After sentiment changed, technology shares fell sharply. The Nasdaq lost about 78% of its value from its 2000 peak to its October 2002 low. Numerous internet companies failed, while stronger firms survived and later became major businesses.
The crash is often confused with the dot-com bubble itself. The bubble describes the period of speculative overvaluation; the crash describes the subsequent market collapse. The 2001 recession and the September 11 attacks affected markets too, but they did not begin the bubble’s formation.