Which bubble’s collapse caused the early-2000s crash in technology stocks?

The collapse of the dot-com bubble caused the early-2000s crash in technology stocks.

During the late 1990s, investors poured money into internet companies, many of which had little revenue or no profits. Rapid adoption of the World Wide Web encouraged the belief that online businesses would quickly transform commerce and justify exceptionally high valuations. The Nasdaq Composite became a major symbol of this speculation.

The bubble peaked in March 2000. As investors demanded evidence of sustainable earnings, technology shares fell heavily. The Nasdaq lost roughly 78 percent of its value from its March 2000 peak to its October 2002 low. Numerous internet companies failed, while stronger businesses survived and later became major technology firms.

The crash is often confused with the 2001 recession, but the recession and the equity collapse were related rather than identical. The bubble describes the speculative rise and its reversal; the recession describes a broader contraction in economic activity.