Nasdaq 100’s Remarkable 3% Jump Triggers Memories of the Dot-Com Bubble

Bespoke analysts suggest that historical trends and seasonal factors could prompt a decline in U.S. stocks in the coming weeks. The recent surge in the tech-heavy Nasdaq 100 index, reaching its highest level since March 2000, echoes the exuberance of the dot-com era, which ended in a market downturn and recession. Bespoke notes that while such substantial gains haven’t occurred since 2000, similar occurrences were frequent in the lead-up to the dot-com bubble peak.

The S&P 500 also experienced a significant one-day advance to a new all-time high, a feat not seen since March 2000. Bespoke’s data illustrates previous instances of such gains in the index, showing mixed performance in the days and weeks following.

Despite the recent market enthusiasm, fueled by strong quarterly results and positive economic indicators, concerns linger about the sustainability of the rally, particularly regarding the timing of potential interest rate adjustments by the Federal Reserve.

The latest surge in stock prices followed Nvidia Corp.’s impressive revenue forecast, propelling major indexes to new record highs. However, ongoing discussions among market participants draw parallels between current market trends and the dot-com bubble, raising cautionary flags.

While Bespoke analysts refrain from directly likening the current market rally to the dot-com bubble, they highlight historical patterns and the traditionally weak performance of stocks in the upcoming month as potential indicators of an impending pullback.

On Friday, U.S. stocks mostly closed higher, with the Nasdaq Composite fluctuating, while the S&P 500 and Dow industrials poised for further record highs and their most significant weekly gains of the year.

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