A stock market bubble is a rapid rise in asset prices that are detached from their intrinsic value, driven by speculation and collective psychology rather than fundamentals. This self-reinforcing cycle leads to prices becoming unsustainable until the bubble eventually bursts, causing a sharp price correction and significant investor losses. The phenomenon is fueled by factors like the fear of missing out (FOMO) and “irrational exuberance,” which can override rational valuation and economic performance.

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