Trading Day: On the verge of a US shutdown

By Lewis Krauskopf

(Reuters) -TRADING DAY

Making sense of the forces driving global markets

By Lewis Krauskopf, Markets Reporter 

Jamie McGeever is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what's happening in markets. We are just hours away from a U.S. government shutdown, barring a last-ditch agreement between Republicans and Democrats to fund federal agencies. I'd love to hear from you, so please reach out to me with comments at .

Today's Key Reads

1. Trump warns Democrats of 'irreversible' actions ingovernment shutdown 2. For global M&A, third quarter was one of the best – andworst – in recent history 3. After lull, Wall Street eyes volatility pickup as risksbuild 4. CoreWeave signs $14 billion AI infrastructure deal withMeta 5. Trump announces Pfizer price cuts as White House pressesdrugmakers    

Today's Key Market Moves

* STOCKS: Major U.S. indexes ended higher on the day andposted strong gains for September -- a historically treacherousmonth for equities -- and for the third quarter. * SHARES/SECTORS: Healthcare is top-performing S&P 500sector on the day, led higher by drugmaker shares after Pfizer'sagreement with President Donald Trump relieved some fears abouttariffs and more onerous drug-pricing measures on the industry * FX: The U.S. dollar weakened against major currenciesahead of an anticipated U.S. government shutdown * BONDS: Benchmark Treasury yields were little changed withthe 10-year yield last around 4.15% * COMMODITIES: Oil prices slid for a second day this week asinvestors braced for a supply surplus. Another record high forred-hot gold.

Today's Key Talking Points

* Midnight approaches 

Unless Republicans and Democrats reach an agreement to at least temporarily fund federal agencies in the next few hours, the U.S. government would enter its 15th shutdown since 1981.

In a salvo ahead of the deadline, President Donald Trump warned congressional Democrats that allowing the federal government to shut down would let his administration take "irreversible" actions including closing programs important to them.

The government last shut down for over 30 days in 2018 and 2019, during Trump's first term.

* More Trump tariff tumult

While tariffs have receded as the main factor driving markets, Trump demonstrated this week that he continues to favor the levies as a key policy tool.

The Republican president started the week saying he would impose a 100% tariff on all films produced overseas that are then sent into the U.S., signaling his willingness to extend protectionist trade policies into cultural industries. Then late last night, the White House said Trump signed a proclamation to set a 10% tariff rate on imports of lumber and 25% on vanities, kitchen cabinets and upholstered wooden products.

Tariffs also appeared to be a key lever Trump used in securing an agreement from Pfizer to lower drug prices. Trump said on Tuesday that the drugmaker will cut the price of all prescription drugs in the Medicaid program for low-income Americans and sell new medicines at a "most-favored-nation" price, in exchange for tariff relief.

* "Buy gold" not getting old

A day after topping $3,800 an ounce for the first time, gold prices hit another record high on Tuesday. The yellow metal climbed over 11% in September alone, pushing its year-to-date ascent to about 47%.

Uncertainty over the government shutdown appeared to be helping the bid for the safe-haven asset.

What could move markets tomorrow?

* US ISM manufacturing (September) * ADP employment (September) * Euro zone flash inflation (September)

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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(By Lewis Krauskopf, Editing by Bill Berkrot)