The market collapse that followed the bursting of the technology-stock bubble after the Nasdaq’s March 2000 peak was the dot-com crash.
During the late 1990s, investors poured money into internet and technology companies, often valuing businesses on expected future growth rather than current profits. The Nasdaq Composite reached an intraday peak of 5,132.52 on March 10, 2000. As earnings failed to match expectations and interest rates rose, technology shares began a prolonged decline.
The downturn wiped out trillions of dollars in market value and led to many bankruptcies, mergers, and layoffs across the technology sector. The Nasdaq eventually fell about 78% from its peak to its October 2002 low, although several large technology companies survived and later became dominant businesses.
The dot-com crash is sometimes confused with the 2008 financial crisis. The earlier crash centered on technology-stock valuations and internet startups, while the later crisis was driven primarily by housing finance, banking losses, and credit-market failures.