Not everyone is smiling again. Bitcoin took further a sharp knock and is now about 27pc below its early-November peak, while tech companies – which have been at the forefront of the recent rally – are still not back to pre-‘Powell pivot’ strength. In part, investors are growing more nervous about unprofitable tech stocks while the meme mania is dying down. 

Cathie Wood, the Californian star asset manager with tech-heavy bets that include electric car maker Tesla, has been left nursing severe losses on one of her biggest funds, the Ark Innovation ETF, which is nearly 38pc below its February high.

It ended a run of standout performance for Wood, who founded Ark Invest in 2014 – the company had ridden the post-Covid-19 surge in tech stocks like no other. Her flagship fund rose more than 150pc last year.

Charlie Munger, business partner of investment legend Warren Buffett, put the boot into market trends during an interview last week when he compared the current situation to the tech crash that ushered in the new millenium.

“The dotcom boom was crazier in terms of valuations than even what we have now,” he said. “But overall, I consider this era even crazier than the dotcom era.”

Signs of frothiness can be seen across the market: the crucial question may be when the biggest players start to skim it off.

The real earnings yield on the S&P 500 is at -2.9pc, the lowest since 1947, according to Bank of America’s bearish analysts, who predict a looming correction. The measure, based on adjusting a forward yield based on soaring inflation, shows that investors face losses unless companies can build on a stellar run of recent results.

Each of the last four times the real earnings yield fell into negative territory, a market crash followed: the post-WW2 slump, the 1970s stagflation phase, the ‘Volcker shock’ of the 1980s, and the dotcom crash.