The Nasdaq Composite, the principal index of the Nasdaq stock exchange, peaked at 5,048.62 during the dot-com bubble on March 10, 2000.
The index had risen rapidly as investors bought shares in internet, telecommunications, and technology companies. Many businesses had little or no profit, but optimistic expectations about online commerce supported very high valuations. The Nasdaq's concentration in technology stocks made it especially sensitive when sentiment changed.
After the March 2000 peak, the dot-com bubble burst. The Nasdaq fell dramatically over the following years, losing roughly 78 percent of its value from peak to trough. The crash did not eliminate the internet economy; companies with strong business models eventually became major firms. A common mix-up is to identify the Dow as the main dot-com index. The Dow was affected, but the Nasdaq Composite was the clearest market barometer for the technology-led boom and collapse.