- FTSE 100 rises 100 to 9,457 - a new record
- AstraZeneca and Big Pharma lifted by Pfizer deal with Trump
- UK manufacturing data weakens
At the close: So, the drugs work
It seems the drugs do work. A wave of euphoria lifted the blue-chip index 1% higher, propelled by the pharma stocks and AstraZeneca in particular.
The Anglo-Swedish giant surged 8.5% into rarefied air after the Trump administration handed out a shot in the arm to the sector, after hobbling drugmakers' shares with the threat of tariffs for months.
But overnight, a minor miracle cure emerged in the form of Pfizer’s deal on MFN (no, not Monday Night Football), shorthand for “most favoured nation” drug pricing.
In exchange for a $70 billion investment pledge and promises to bring manufacturing back to US soil, Pfizer has secured a three-year exemption from tariffs.
The agreement rests on three pillars: selling nearly its entire portfolio of prescription drugs to Medicaid at MFN levels (discounts averaging 50%), launching new drugs in the US at parity with peer countries, and joining TrumpRx, a discount platform offering medicines direct to out-of-pocket consumers that will be launched next year.
For European rivals, JPMorgan argues the fallout looks manageable.
Investors, though, only saw the headline boost, sparking a rally across the sector and propelling the Footsie to record heights.
2.49pm: Decline on Wall Street, as Footsie hits new highs
It's a negaitve start on Wall Street, while in London the FTSE 100 is on another leg higher, breaking more new ground.
Across the pond, S&P 500 is down 0.2% and the Nasdaq is down 0.3%, while the Dow Jones is flat.
All but three of the largest 15 companies in the S&P are in red.
Fallers are led by media and financials, with Live Nation, Interactive Brokers, Charles Schwab, Netflix, News Corp and Fox Corp.
On the Nasdaq 100, the biggest declines are seen at Marvell Technology, Netflix, Meta Platforms, Adobe and Palantir.
In the Square Mile, the leaderboard is still led by AstraZeneca, up 8.4% now.
Next comes Hikma Pharmaceuticals, JD Sports Fashion, GSK and London Stock Exchange.
1.39pm: Gold rally has more legs
Spot gold prices have topped $3,890/oz and futures have crossed the $4,000 mark, though UBS thinks the rally still has legs.
With the Federal Reserve easing policy, the dollar softening and real interest rates falling, the bank argues that conditions remain supportive for bullion.
Lower “carry costs”, the expense of holding gold rather than interest-bearing assets, should also draw more money into exchange-traded funds, where inflows have already picked up.
Seasonal patterns may help too: physical buying tends to strengthen in the final quarter of the year and into early spring.
UBS expects demand from both retail and institutional investors, as well as central banks and buyers in Europe, Asia and the Middle East, to provide a floor on any dips.
12.48pm: FTSE 100 on top, US futures in red
The FTSE 100 is the top performer in Europe this morning, as it notches new record highs.
London's 0.6% gain compares to 0.5% for Germany's DAX, 0.4% for France's CAC and 0.3% for Spain's IBEX and 0.2% for Italy's MIB.
US stock futures offer a contrast, with the S&P 500 and Dow Jones looking to be heading for declines of 0.4%, with Nasdaq 100 futures down 0.45%.
Market watchers are firmly focused on the US government shutdown drama.
"With little sign of progress toward a deal, traders are preparing for the possibility that both jobless claims and Friday’s non-farm payrolls release will be delayed, elevating the importance of today’s ADP private payrolls report," says Joshua Mahony at Scope Markets.
"While often dismissed in the past for its weak correlation with the official jobs data, recent downward revisions have meant ADP has proven a more reliable early indicator of the revised payrolls figure than the initial NFP print. With markets expecting an ADP figure around 55-65k, the recent weakness looks like it could continue in August."
As for the shutdown, others below note that they have not tended to affect markets much.
Mahony says they have delivered "bouts of volatility, but the precedent has been that weakness tends to be short-lived and presents buying opportunities".
The last shutdown saw Donald Trump preside over a 34-day stretch that represented the longest in US history, with the President using the period as an opportunity to push through his policy to build a wall with Mexico.
"This time around it is the Democrats seeking provisions, with recent reductions in healthcare spending particularly in focus as the Democrats see this as one the last opportunities to water down Trump’s spending cuts.
"Meanwhile, Trump could use this opportunity to slash jobs, meaning that both Republicans and Democrats could have justification for keeping this shutdown rolling on beyond this week."
11.51am: Bookies' potential impact from Budget
Entain and Flutter dropped yesterday as the Labour Party conference brought signals that the Chancellor could hit betting companies with higher levies in the Budget.
Analysts at Citi noted that the comments follow an August report from the IPPR think-tank that floated steep reforms, including raising machine and remote gaming duty to 50%.
That scenario, the bank estimates, would cut Flutter 2026 EBITDA 10% and Entain 18%, even after cost-cutting.
While Citi thinks such drastic moves are unlikely, the Chancellor’s words make some increase more probable, with a base case assuming a five percentage point rise in online gambling tax, hitting Flutter’s EBITDA by roughly 2% and Entain’s by 4%.
11.35am: Fracking ban
Energy minister Ed Miliband has announced a complete government ban on fracking in the UK, opposing pro-fracking plans from Reform.
Understandably this has been hailed by Greenpeace as "absolutely right".
"After years of hype, all this industry has brought to the UK are earthquakes and a couple of holes in a muddy field in Lancashire.
"Fracking is polluting, deeply unpopular, and even if it could be made to work in the UK, it’ll do nothing to lower energy bills. Ministers are right to focus on renewable energy as our best chance to create jobs, boost our energy independence and protect households from the turbulence of gas markets."
11.02am: AI bubble warning
UK tech investor James Anderson, ex Scottish Mortgage fund manager who was an early backer of Tesla and Amazon, says the lofty valuations of AI companies is "disconcerting".
Now managing partner of Lingotto, Anderson has told the FT that "up until the last couple of months or so ... there wasn’t really much sign of a bubble" in AI.
With reports that OpenAI is in funding talks where it would have a valuation of $500 billion, up from $157 billion last October, he says this is "disconcerting".
"That scale of jump and the pace with which it happened did bother me."
10.34am: JD boosted by Nike beat, but UBS sees problems
JD Sports Fashion PLC (LSE:JD., OTC:JDSPY) shares are up 1.7%, which is likely to be related to earnings from Nike Inc (NYSE:NKE) overnight.
Expectations were low, and were well beaten.
Sales rose 1.1% year on year to $11.72 billion, ahead of Wall Street estimates around $11 billion, while earnings per share of $0.49 per share were above analysts’ consensus estimates of $0.27.
"Nike has easily hurdled over the low expectations set for its earnings," says market analyst Chris Beauchamp at IG.
He says the "massive beat will help to obscure the fact that sales were down sharply. Investors can hope that all the bad news on tariffs is fully-priced in, but any lingering wariness is understandable given the repeated false dawns over the last five years."
Robert Krankowski at UBS highlights Nike's increased promotional activity in EMEA, which prompted the company to raise promotions in its Direct channel.
"This could present a headwind for JD Sports, historically highly sensitive to changes in Nike's promotional strategy in Europe."
At the same time, he notes Nike's "strong traction with product allocation expansion" that supports his view that southern states "may remain a more challenging market for JD Sports given rising competition".
10.07am: Footsie blasting higher
The FTSE 100 has blasted through the 9,400 level, up 0.7% this morning and since the start of the year up almost 14% from around 8,200.
Big pharma names are leading the way this morning on US pricing news from the sector.
There's also general positive sentiment, with all but five of the top 20 largest shares in positive territory.
Defence and aerospace names are among the fallers, with Rolls Royce down 1.7% and BAE falling 0.9%.
9.46am: UK manufacturing PMI worsens
The UK manufacturing sector weakened further in September, with the PMI index falling to a five-month low of 46.2, from 47.0 in August.
This was the 11th month of falling production and the 12th month below the 50 mark that separates contraction from expansion.
"The effects of the downturn were widespread, with the consumer, intermediate and investment goods sectors all seeing output fall at solid rates," said S&P Global, the compiler of the PMI survey.
"Manufacturers reported that production had been scaled back in response to weaker intakes of new business, with demand from both domestic and export markets weak."
Reports of new order intakes fell for the 12th month in a row to around a two-year low, with the blame put on subdued client confidence, US tariff uncertainty and the consequences of high costs for energy and staff.
Automotive supply chains were disrupted following the production shutdown at Jaguar Land Rover.
"There is some better news," said S&P's Rob Dobson, with a number of firms noting that "lean inventories, combined with hopes that market and globe trade uncertainties could subside, may boost production volumes".
"There are also signs that, while costs are still high overall, the pace at which they are increasing is slowing. This could provide some wiggle room for interest rate cuts to support growth and also help offset any higher taxes announced in November's Budget."
9.26am: What Pfizer deal would mean for EU pharma companies
There's lots of analyst commentary on the Trump administration's Pfizer deal on 'most favoured nation' (MFN) pricing from last night.
"Overall," says the JPMorgan pharma team, "we see Pfizer’s agreement on MFN as a potential bellwether for the sector, which we anticipate is likely to be replicated by EU Pharma companies and should therefore result in a broadly manageable impact from MFN on EU Pharma, reassuring investors."
With Pfizer agreeing to MFN prices on almost all of their portfolio through the Medicaid channel, in line with President Trump’s request
in July, JPMorgan said Medicaid exposure is "relatively modest" for EU pharma companies.
It was calculated to represent around 6% of US sales on average, with circa 5% exposure for AstraZeneca, Novartis, Roche and Novo Nordisk and with higher exposure for GSK at 10-15% due to HIV drugs and Sanofi at 10-15%.
With Medicaid net prices typically around 20-30% higher than the EU, adoption of MFN pricing for Medicaid by EU pharma is estimated to result in an average 1% negative impact on group sales and a 2% hit to group earnings, before any potential cost mitigation measures.
For new drug launches, Pfizer committed to pricing new drugs in the US in-line with MFN countries, which JPMorgan sees as "broadly manageable for EU Pharma if agreed to".
8.47am: Consequences of US govt shutdown
With Q4 underway, "all eyes are now on the US government shutdown," says Jim Reid at Deutsche Bank, after talks in the Senate failed to find an agreement overnight, the first time in almost seven years.
"There are no signs of an imminent compromise between the White House and the Democrats, and the Republican leadership in the Senate suggested that any further votes may not take place until after the Yom Kippur holiday on Thursday."
President Trump has reiterated his threat to dismiss "a lot" of federal workers during the shutdown.
While markets historically have taken shutdowns in their stride, Reid said the practical terms could have a "big impact for this week is that we’re flying blind on the economic data front".
"So as it stands, we won’t get a jobs report on Friday," as the Bureau of Labor Statistics (BLS) will not be releasing new data.
"Contrary to our prior expectations the Labor Department yesterday said we won't see US jobless claims in the shutdown either."
The BLS produce the CPI report on October 15 too, if the shutdown lasts that long.
"That isn’t out of the question, as the last shutdown in 2018-19 (also under Mr Trump) lasted for a record 35 days.
"So other measures, like the ADP’s report of private payrolls today, could well take on added significance until we get the BLS numbers again."
8.26am: Greggs jumps despite 'middling' statement
Greggs PLC (LSE:GRG) shares are up 6.2% this morning, despite growth slipping from 2.6% in the first to 1.5%.
Analyst Jonathan Pritchard at Peel Hunt said the trading update "suggests that while July was very difficult, August and September were better, and guidance remains unchanged".
He noted that LFL sales slipped despite an easier comparative in Q3 last year, which "implies volume losses as Greggs has been easing prices higher".
However, the company said some cost pressures have become slightly more manageable, with headline profit guidance unchanged.
He added: "There is a sizeable short position in the shares and, while this is a middling statement, the shares may be relieved it was not worse."
8.13am: FTSE 100 heads for new heights
The FTSE 100 has defied futures market caution and has romped on to further record territory.
In initial trades, the London index has stepped 31 points higher to a new all-time high of over 9,381.
Drug companies are leading the way, with Hikma Pharmaceuticals PLC (LSE:HIK, OTC:HKMPF), AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) and GSK PLC (LSE:GSK, NYSE:GSK) up 4.5%, 3.3% and 1.5%.
This follows last night's news that the Trump administration had agreed its first deal on "most favoured nation" drug pricing with Pfizer.
The US drugmaker will offer discounts averaging 50% on many of its prescription drugs and the company said it has agreed to a three-year "grace period" during which time its products won't face tariffs, provided it ups investment in US manufacturing.
7.58am: Taylor Wimpey's new targets
Taylor Wimpey PLC (LSE:TW.) has reported a slightly softer sales rate for the past quarter, but set out new targets for the medium term.
The housebuilder's net private sales rate for the nine weeks to 28 September 2025 was 0.65 per outlet per week, down from 0.70 in the equivalent period in 2024.
The FTSE 250-listed group called this a "robust" performance against the backdrop of "softer market conditions beginning in the second quarter", with house prices remaining "broadly flat".
New medium-term growth targets include delivering 14,000 UK completions excluding joint ventures, with an operating profit margin of 16-18% and a return on net operating assets above 20%.
"Growth will be driven by higher outlet numbers, without the need for net land investment as we unlock the value of our strong, existing landbank and reinvest in smaller sites," the housebuilder said.
7.34am: Greggs sales cool
Greggs PLC (LSE:GRG) has reported a further cooling of sales growth in the third quarter but insisted that its full-year outlook was unchanged.
The bakery chain said total sales rose 6.1% in the 13 weeks to 27 September, down from 7% in the first half of the year.
Like-for-like company-managed shop sales increased 1.5% in Q3, compared to 2.6% in the first half.
The FTSE 250-listed group said its trading performance improved through August and September following heat-impacted trading in July.
7.27am: US government shutdown
The US government has shut down from today as politicians in Wasghington failed to agree on a plan to continue funding it.
"This is not the first time this has happened, and it certainly won’t be the last," says market analyst Ipek Ozkardeskaya at Swissquote Bank, noting that the average duration is about eight days, but the longest was over a month and was in Donald Trump's first term.
"The market impact of shutdowns is not necessarily dramatic – far from it. For bonds, the flight to safety usually benefits US Treasuries, and since the government continues servicing its debt during shutdowns, the overall impact is limited, slightly positive.
"That’s what we see this morning, with the US 10-year yield edging lower on shutdown headlines."
The US dollar tends to weaken when the government shuts down, she added, so limited dollar appetite and a softer DXY index are "no surprise today".
She says the pound could push back above 1.35 "despite ongoing UK political noise".
7.15am: FTSE 100 to pause for breath?
After reaching a new record high the day before, the FTSE 100 is predicted to pause for breath on Wednesday as the month of October and the final quarter of the year begin.
Futures for the London benchmark were wavering between gains and losses of two or three points, having climbed 50.6 points yesterday to close the month and the third quarter at an all-time closing high of 9,350.43.
Over the whole of September, the UK index added 163.09, around 1.7%. Over the third quarter of 2025, which started in July at just over 8,760, the Footsie rose 589 points or 6.7%.
That compares to the 2.1% gain in the second quarter and is back to the form seen at the start of the year and the 6% rise in the first quarter.
Overnight, Wall Street recovered from an uncertain start to finish on the front foot, with the S&P 500 rising 0.4%, the Nasdaq adding 0.3% and the Dow Jones progressing 0.2%.
Back in the UK, Nationwide's house price index showed anual growth of 2.2% for September, up from 2.1% the month before and higher than the 1.8% expected.