Nasdaq · May 22, 2001
Seven weeks bought by rate cuts
+41.19%
trough back to the old high
33 trading days · 2001-04-04 → 2001-05-22
What happened that day?
- From the low on 4 April 2001 to the high on 22 May, the Nasdaq rose 41.19% over 33 trading days
- It was the largest rally of the entire dot-com collapse, recovering more than a quarter of the index in seven weeks
- The starting point was 18 April, when the Fed held an unscheduled meeting and cut sharply. It was the fourth cut of that year
- The market of the time believed that cutting rates would turn the economy soon, because that is how it had worked for the previous decade
- This time, though, the problem was not the price of money but excess capacity. Unneeded telecom lines and servers were already in the ground
- So orders did not come back no matter how far rates fell, and the rally ended after seven weeks
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.