How did the dot-com boom contribute to challenges for the U. S.
economy in the mid-1990s?

Initial success and overvaluation made the dot com bubble potential to burst at the turn of century.

Explanation:

By the end of the twentieth century, the Internet generated a euphoric way of doing business and raised many expectations for the potential of online commerce. For this reason, several Internet companies have been founded, and investors have believed that a business that operates online would be a huge success. But, sadly, many of these companies popularly called dot-coms were not successful as thought to be, and most of the successes were extremely overvalued. Therefore,  many of these firms have collapsed, leaving investors with substantial losses.