Stock market is now ‘as wild as it was during the tech-stock bubble’

Global stock market volatility has surged to levels reminiscent of the dotcom bubble, raising concerns among investors and fund managers. In May, two memory-chip stocks, Micron Technology and South Korea’s SK Hynix, contributed 17% of the MSCI All Country World Index’s gains despite representing just 1.1% of the index. April and May 2026 were the third- and fourth-most dispersed months in market history, trailing only December 1999 and February 2000, when the tech-stock bubble peaked. Acadian Asset Management’s Dr. Owen Lamont, an expert on the dotcom era, described the current market as ‘as wild as it was during the tech-stock bubble’ in a note titled *The whirlwind is upon us*. The extreme dispersion has created challenges for active fund managers, with those lacking exposure to top-performing stocks lagging their benchmarks by nearly 1% in a single month. This could trigger a feedback loop similar to past speculative manias, where underweight managers chase returns, further inflating prices. Lamont emphasized that high dispersion alone does not confirm a bubble but serves as a warning sign. Some price swings may reflect genuine economic shifts, such as the market’s reaction to AI advancements, rather than pure speculation. The current volatility could be a mix of speculative behavior and rational repricing, though history suggests investors should remain cautious when market patterns mirror those of 1999. The situation highlights the risks of overbought markets, where a few high-flying stocks disproportionately drive index performance. While not all dispersion indicates a bubble, the parallels to past speculative eras warrant closer attention. Investors and fund managers are advised to monitor trends, as extreme market movements can distort valuations and create unstable conditions.