The US stock market is displaying a rare and troubling pattern that analysts say has not been seen since the late 1990s, just before the dot-com bubble burst.
That historic crash wiped out trillions of dollars in market value and devastated millions of investors who had poured money into overvalued technology stocks.
The dot-com collapse, which began in March 2000, sent the Nasdaq tumbling by nearly 80 percent over the following two years, erasing vast amounts of wealth almost overnight.
Market historians have long studied the conditions that preceded that crash, noting that euphoric investor sentiment and sky-high valuations were among the clearest warning signs at the time.
Today, many of those same conditions appear to be resurfacing, with technology stocks once again trading at historically elevated price-to-earnings multiples that give some analysts serious pause.
Concentration risk is also a growing concern, as a small number of mega-cap technology companies now account for a disproportionately large share of major index returns and overall market capitalisation.
This kind of narrow market leadership, where gains are driven by just a handful of names rather than broad participation, has historically preceded periods of significant market instability.
Investor enthusiasm for artificial intelligence has added further fuel to valuations, drawing comparisons to the breathless excitement that surrounded internet companies in the late 1990s before reality set in.
At that time, many businesses with little revenue and no clear path to profitability commanded enormous market capitalisations simply because they were associated with an exciting new technology.
Critics argue that while AI represents genuine transformative potential, the speed and scale of the resulting stock market re-rating may have moved well ahead of actual earnings and commercial delivery.
For retail investors, the key lesson from history is that warning signals in markets rarely arrive with clear timestamps, meaning that acting prudently on early data remains both difficult and essential.
Financial advisers broadly recommend that investors review portfolio concentration, consider rebalancing toward defensive assets, and resist the temptation to chase momentum in richly valued sectors during periods of elevated risk.