Warning: The Stock Market Is Doing Something Last Seen Before the Dot-Com Crash -- and Investors Should Pay Attention
Yahoo Finance ·
Investors who have been around a while no doubt remember the dot-com bubble and subsequent crash quite well. The S&P 500 ( ^GSPC +0.00% ) sank as much as 48% between January 2000 and July 2002. The Nasdaq-100 plunged more than 80%. It took years for the indexes to fully recover. That tumultuous period might seem like ancient history today with the S&P 500 and Nasdaq-100 trading near their all-time highs. But could there be a dangerous undercurrent below the surface? Maybe. The stock market is doing something last seen before the dot-com crash -- and investors should pay attention. Major Wall Street investment firms pay big bucks to analysts to closely monitor market patterns and trends that could easily be overlooked. JPMorgan Chase ( JPM 0.11% ) is one of them. The big bank's Jason Hunter wrote to investors last week, issuing a stark warning. Hunter identified what he called a "growing divergence" between artificial intelligence (AI) hardware stocks and the stocks of companies investing heavily in AI infrastructure spending. For example, Micron ( MU 5.68% ) provides memory chips used in AI data centers. The stock has skyrocketed close to 250% year to date. Meanwhile, the so-called "Magnificent Seven" stocks with ginormous AI-related capital expenditures haven't performed nearly as well. Shares of two of the group's biggest AI spenders, Amazon ( AMZN +0.55% ) and Microsoft ( MSFT +1.69% ) , have delivered negative returns so far in 2026. Hunter wrote that this price performance gap is "reminiscent of the 1999-2000 dynamic."
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