Tech Stocks Rebound, but History Warns the Selling May Not Be Over

A recovery in tech stocks does not necessarily mean the selloff is over. The dot-com crash offers a historical warning: before the 2000 collapse, the S&P 500 rallied 12% and reclaimed its previous highs.
Investors who went heavily long because “the internet is the future” were ultimately right about the technology but still suffered losses of roughly 50% over the following two years.
The downturn included three separate bear-market rallies of around 20% before the market finally bottomed in 2002. It then took approximately 14 years for the S&P 500 to break even on a nominal basis.
The takeaway: a temporary rebound does not eliminate downside risk, especially when historically high valuations coincide with what the author describes as the biggest supply crisis in human history.