Dot-com bust, 1987 crash had massive relief rallies similar to Wednesday’s pop
The Nasdaq Marketsite is seen during morning trading on April 7, 2025 in New York City.
Michael M. Santiago | Getty Images
Every bear market has days like this.
The Nasdaq soared 12% on Wednesday, the second-best day on record for the tech-heavy index and its sharpest rally since January 2001, which was the middle of the dot-com crash.
During the financial crisis in October 2008, the Nasdaq enjoyed two of its best five days ever. The other two came as the tech bubble was bursting. The index’s sixth-best day since its beginning in 1971 came on March 13, 2020, as the Covid pandemic was hitting the U.S.
Of the 25 best days for the Nasdaq, including Wednesday, 22 took place during the dot-com collapse, the 2008-09 financial crisis or the early days of Covid. One occurred on Oct. 21, 1987, two days after Black Monday. The other was in November 2022.
Call it a dead-cat bounce, a relief rally or short covering. It’s a familiar reaction during the worst of times for Wall Street.
Be prepared for plenty more volatility.
The worst month on record for the Nasdaq was October 1987, when the index plunged 27%. Second to that was a 23% drop in November 2000. In March 2020, the Nasdaq sank 10%. It’s still down 1% this month just after closing out its worst quarter since 2022.
President Donald Trump sparked the Wednesday bounce when he dropped new tariff rates on imports from most U.S. trade partners to 10% for 90 days to allow trade negotiations with those countries. The president’s social media post lifted optimism that levies would be less severe than expected and immediately boosted a market that’s been hammered since Trump rolled out his sweeping tariff plan last week.
Wealthy Trump donors and business leaders, including hedge fund manager Bill Ackman, Home Depot co-founder Ken Langone and billionaire investor Leon Cooperman have weighed in with hefty criticism of Trump’s tariffs. JPMorgan Chase CEO Jamie Dimon said earlier on Wednesday that the tariffs will likely lead to a recession, after BlackRock CEO Larry Fink said Monday at an event in New York that, “Most CEOs I talk to would say we are probably in a recession right now.”
SpaceX CEO Elon Musk attends a cabinet meeting held by U.S. President Donald Trump at the White House on March 24, 2025.
Win McNamee | Getty Images
Tesla CEO Elon Musk, the world’s richest person and one of Trump’s closest confidantes in the White House, spent the early part of this week slamming Peter Navarro, Trump’s top trade advisor, calling him a “moron” and “dumber than a sack of bricks.”
Musk’s electric vehicle company has gotten pummeled of late, tumbling 22% in the four prior trading sessions after suffering its worst quarter since 2022. The stock soared 23% on Wednesday, its second-best day on record.
The big difference between the current market tumult and the downturns in 1987, 2000-2001, 2008 and 2020 is that many investors say this one was easily avoidable and, potentially, can be reversed based on what the president decides to do.
“What Trump unveiled Wednesday is stupid, wrong, arrogantly extreme, ignorant trade-wise and addressing a non-problem with misguided tools,” investor Ken Fisher wrote in a post on X on Monday, referring to last week’s announcement. “Yet, as near as I can tell it will fade and fail and the fear is bigger than the problem, which from here is bullish.”
Trying to predict Trump’s next move is a fool’s errand.
On Sunday evening the president told reporters that he’s not trying to push the market down, “but sometimes you have to take medicine to fix something.” He stressed the importance of fixing the country’s trade deficit with China, and said “unless we solve that problem, I’m not going to make a deal.”
The president is keeping his hard line on China, at least for now. He said on Wednesday that he was raising the tariff on China higher, to 125%. All other countries would go back to the 10% baseline tariff rate as negotiations take place.
Prior to his latest pronouncement, economic fears had spilled into the bond market, raising concerns that higher interest rates would create further problems for consumers at the worst possible time. The 10-year Treasury note yield, which helps decide rates on mortgages, credit card debt and auto loans, spiked overnight to 4.51% after hitting 3.9% last week. It’s currently at 4.38%.
As the tech industry’s megacap companies, which make up an outsized portion of the Nasdaq and the S&P 500, prepare to report quarterly results starting late this month, management teams will be looking for some visibility that can guide forecasts for the rest of the year and into 2026.
In the absence of more clarity, many of their plans will likely be on hold as they figure out how much existing and expected tariffs will raise costs and hurt revenue, and what they need to do to shore up supply chains.
Wednesday provided some relief. Investors like Ackman are celebrating.
“This was brilliantly executed by @realDonaldTrump,” Ackman wrote on X. “Textbook, Art of the Deal.”
In a note, Wedbush analyst Dan Ives called it “the news we and everyone on the Street was waiting for” after the president’s “self-inflicted Armageddon.”
But for companies that are in the crosshairs of Trump’s wavering policy decisions, all the uncertainty remains.
WATCH: Trump’s 90-day pause
Elon Musk, chief executive officer of Tesla Inc., during a meeting between US President Donald Trump and Cyril Ramaphosa, South Africa’s president, not pictured, in the Oval Office of the White House in Washington, DC, US, on Wednesday, May 21, 2025.
Jim Lo Scalzo | Bloomberg | Getty Images
Tesla shares have dropped 7% from Friday’s closing price of $323.63 to the $300.71 close on Tuesday ahead of the company’s second-quarter deliveries report.
Wall Street analysts are expecting Tesla to report deliveries of around 387,000 — a 13% decline compared to deliveries of nearly 444,000 a year ago, according to a consensus compiled by FactSet. Prediction market Kalshi told CNBC on Tuesday that its traders forecast deliveries of around 364,000.
Shares in the electric vehicle maker had been rising after Tesla started a limited robotaxi service in Austin, Texas, in late June and CEO Elon Musk boasted of its first “driverless delivery” of a car to a customer there.
The stock price took a turn after Musk on Saturday reignited a feud with President Donald Trump over the One Big Beautiful Bill Act, the massive spending bill that the commander-in-chief endorsed. The bill is now heading for a final vote in the House.
That legislation would benefit higher-income households in the U.S. while slashing spending on programs such as Medicaid and food assistance.
Musk did not object to cuts to those specific programs. However, Musk on X said the bill would worsen the U.S. deficit and raise the debt ceiling. The bill includes tax cuts that would add around $3 trillion to the national debt over the next decade, according to an analysis by the Congressional Budget Office.
The Tesla CEO has also criticized aspects of the bill that would cut hundreds of billions of dollars in support for renewable energy development in the U.S. and phase out tax credits for electric vehicles.
Such changes could hurt Tesla as they are expected to lower EV sales by roughly 100,000 vehicles per year by 2035, according to think tank Energy Innovation.
The bill is also expected to reduce renewable energy development by more than 350 cumulative gigawatts in that same time period, according to Energy Innovation. That could pressure Tesla’s Energy division, which sells solar and battery energy storage systems to utilities and other clean energy project developers.
Trump told reporters at the White House on Tuesday that Musk was, “upset that he’s losing his EV mandate,” but that the tech CEO could “lose a lot more than that.” Trump was alluding to the subsidies, incentives and contracts that Musk’s many businesses have relied on.
SpaceX has received over $22 billion from work with the federal government since 2008, according to FedScout, which does federal spending and government contract research. That includes contracts from NASA, the U.S. Air Force and Space Force, among others.
Tesla has reported $11.8 billion in sales of “automotive regulatory credits,” or environmental credits, since 2015, according to an evaluation of the EV maker’s financial filings by Geoff Orazem, CEO of FedScout.
These incentives are largely derived from federal and state regulations in the U.S. that require automakers to sell some number of low-emission vehicles or buy credits from companies like Tesla, which often have an excess.
Regulatory credit sales go straight to Tesla’s bottom line. Credit revenue amounted to approximately 60% of Tesla’s net income in the second quarter of 2024.
WATCH: Threats to SpaceX & Tesla as Musk, Trump feud heats up
Amazon founder Jeff Bezos leaves Aman Venice hotel, on the second day of the wedding festivities of Bezos and journalist Lauren Sanchez, in Venice, Italy, June 27, 2025.
Yara Nardi | Reuters
Amazon founder Jeff Bezos unloaded more than 3.3 million shares of his company in a sale valued at roughly $736.7 million, according to a financial filing on Tuesday.
The stock sale is part of a previously arranged trading plan adopted by Bezos in March. Under that arrangement, Bezos plans to sell up to 25 million shares of Amazon over a period ending May 29, 2026.
Bezos, who stepped down as Amazon’s CEO in 2021 but remains chairman, has been selling stock in the company at a regular clip in recent years, though he’s still the largest individual shareholder. He adopted a similar trading plan in February 2024 to sell up to 50 million shares of Amazon stock through late January of this year.
Bezos previously said he’d sell about $1 billion in Amazon stock each year to fund his space exploration company, Blue Origin. He’s also donated shares to Day 1 Academies, his nonprofit that’s building a chain of Montessori-inspired preschools across several states.
The most recent stock sale comes after Bezos and Lauren Sanchez tied the knot last week in a lavish wedding in Venice. The star-studded celebration, which took place over three days and sparked protests from some local residents, was estimated to cost around $50 million.
Bezos is ranked third in Bloomberg’s Billionaires Index with a net worth of about $240 billion. He’s behind Tesla CEO Elon Musk at $363 billion and Meta CEO Mark Zuckerberg at $260 billion.
WATCH: Amazon CEO Jeff Bezos’ wedding sparks Venice protests
Google CEO Sundar Pichai addresses the crowd during Google’s annual I/O developers conference in Mountain View, California on May 20, 2025.
Camille Cohen | AFP | Getty Images
The Google Doodle is Alphabet’s most valuable piece of real estate, and on Tuesday, the company used that space to promote “AI Mode,” its latest AI search product.
Google’s Chrome browser landing pages and Google’s home page featured an animated image that, when clicked, leads users to AI Mode, the company’s latest search product. The doodle image also includes a share button.
The promotion of AI Mode on the Google Doodle comes as the tech company makes efforts to expose more users to its latest AI features amid pressure from artificial intelligence startups. That includes OpenAI which makes ChatGPT, Anthropic which makes Claude and Perplexity AI, which bills itself as an “AI-powered answer engine.”
Google’s “Doodle” Tuesday directed users to its search chatbot-like experience “AI Mode”
AI Mode is Google’s chatbot-like experience for complex user questions. The company began displaying AI Mode alongside its search results page in March.
“Search whatever’s on your mind and get AI-powered responses,” the product description reads when clicked from the home page.
AI Mode is powered by Google’s flagship AI model Gemini, and the tool has rolled out to more U.S. users since its launch. Users can ask AI Mode questions using text, voice or images. Google says AI Mode makes it easier to find answers to complex questions that might have previously required multiple searches.
In May, Google tested the AI Mode feature directly beneath the Google search bar, replacing the “I’m Feeling Lucky” widget — a place where Google rarely makes changes.
WATCH: Google buyouts highlight tech’s cost-cutting amid AI CapEx boom
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