Dot-Com Bubble: Bursting Point
A Historic Stock Market Phenomenon
In March 2000, the tech-heavy NASDAQ Composite index reached its peak at 5048.62, marking the height of the dot-com bubble. This period, spanning from approximately 1995 to 2001, was characterized by a surge in investments in internet-based businesses, fueled by a bullish stock market.
Interest Rate Hike Triggers Collapse
The bubble's burst was triggered by a modest interest rate increase announced by the US Federal Reserve in early 2000. This move caused investors to reassess their risky investments, leading to a sell-off of dot-com stocks.
Devastating Consequences
The collapse of the bubble resulted in significant losses for investors and the failure of numerous Internet companies. The tech sector experienced a severe downturn, leaving a lasting impact on the financial landscape.
Historical Significance
The dot-com bubble serves as a cautionary tale about the dangers of excessive speculation in financial markets. It highlights the importance of sound investment strategies and the potential for bubbles to burst.
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