The Nasdaq Composite fell about 78% from its March 10, 2000 peak to its October 9, 2002 low during the dot-com crash.
The index had risen rapidly as investors poured money into internet and technology companies. Many businesses had limited revenue, large losses, or untested business models, but enthusiasm for the internet encouraged exceptionally high valuations. The Nasdaq reached 5,048.62 before the bubble began to deflate.
As expectations changed, investors sold speculative technology shares. The decline was worsened by tighter financing, disappointing corporate results, and the failure of many internet startups. The September 11 attacks and the broader economic slowdown added further pressure during the bear market.
The dot-com crash did not mean that the internet lacked economic value. Companies such as Amazon and eBay survived and later expanded, while many other firms disappeared. The episode is therefore commonly used to distinguish a transformative technology from unsustainable valuations.