The early-2000s crash centered on internet and technology companies followed the collapse of the Dot-com bubble.
During the late 1990s, investors placed enormous valuations on businesses associated with the internet. Many companies had little revenue, no profits, or untested business models, yet rising share prices encouraged more speculation. The Nasdaq Composite reached its peak on March 10, 2000, before falling sharply over the following years.
The Federal Reserve’s interest-rate policy, the availability of venture capital, and enthusiasm for a supposedly transformative technology all helped fuel the boom. After confidence broke, investors demanded evidence of earnings and sustainable cash flow. Numerous internet start-ups failed, while some companies with stronger technology and finances eventually survived and became major businesses.
The dot-com bubble is not identical to the broader 2000–2002 bear market. The bubble describes the speculative valuation boom; the crash describes the subsequent market decline. The Nasdaq did not regain its March 2000 closing high until 2015, although individual technology companies recovered on very different schedules.