Dot-Com Valuation Flashback Doomed Stock Market to Swift Retreat
- At last record, S&P 500 was the most expensive in two decades
- Stock gauge nears 10% correction from high on Sept. 2
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It was just 12 trading days ago that the S&P 500 capped an almost uninterrupted 60% rally from its March lows, leaving the benchmark at the most-expensive level since the height of the Internet bubble. Since then, about $3 trillion of the index’s value has been erased as it tumbles toward a correction.
Suspected culprits for the selloff abound: Congress hasn’t agreed on another fiscal stimulus package, an increase in Covid-19 case counts in Europe is raising the specter of more lockdowns, and the Federal Reserve last week failed to give new details on its bond-buying plans. Prior to those headlines, stock valuations had been surging, setting the stage for a swift reversal whose speed rivals any in history.