U.S. equity market ended higher on Friday, while the NASDAQ 100 Index gained most by more than 2 percent or 123.5 points to close at 6208.3, which is the record high of closing point. This surge was mainly driven by solid economic growth, which has been shown by its better-than-anticipated Gross Domestic Product.
For NASDAQ 100 on Friday, the biggest gainers of the session were Align Technology Inc (NASDAQ: ALGN), which rose 16.24 percent or 32.96 points to close at 235.94. Amazon.com Inc (NASDAQ: AMZN) gained 13.22 percent or 128.52 points to end at 1100.95 and Intel Corporation (NASDAQ: INTC) was up 7.38 percent or 3.05 points to 44.40 in late trade.
However, The biggest losers included Expedia Inc (NASDAQ: EXPE), lost 15.99 percent or 23.56 points to end at 123.79, while Cerner Corporation (NASDAQ:CERN) declined 8.43 percent or 6.01 points to 65.31 and Baidu Inc (NASDAQ: BIDU) shed 8.15 percent or 21.25 points to close at 239.37.
The U.S. GDP increased at a 3.0 percent annual rate in the third quarter after expanding at a 3.1 percent pace in the previous quarter, according to the Commerce Department on Friday. The overall economy has unexpectedly maintained at a robust pace of growth last quarter as an increase in inventory investment and a smaller trade deficit offset a slowdown, related to hurricanes, in consumer spending and a decline in construction.
As the tax reform from President Trump comes to floor, investors were already increasingly pricing in the effect of a corporate tax cut into the shares of U.S. companies. It is signalling that the Trump administration has little room for error, because if the Republican-controlled Congress fails to pass this policy, seen as the one could determine Trump’s fate, there would be a steep sell-off in the stock market.
Currently as the tightening labour market has spurred the inflation rate approaching to its target of 2 percent, there will be higher chance that the Fed would raise the interest rate in December, and even more quickly in the near future, which could dampen the effects of any tax bill.
Investors should keep an eye on tax legislation introduced next week, which could largely determine the direction of the market for the near future.
Technically the broader outlook for the NASDAQ 100 remains in the upward trend channel from earlier this year. After its surge on Friday, it is approaching the upper level of the channel, which can be consider as a key resistance at this point. If it fails to break higher, it likely continues to move following this channel.
Chart 1: NASDAQ 100 Daily