The FTSE 100 dropped on Wednesday amid a slew of disappointing corporate updates from companies including HSBC and Taylor Wimpey. BAE Systems shares fell despite issuing a fairly respectable half-year report.

London’s leading index was down 0.4% at 9,096 at the time of writing.

There were several high-profile sell-offs for FTSE 100 shares on Wednesday. None more so than HSBC.

HSBC was the biggest drag on the FTSE 100 in terms of the number of points after the bank reported a $2.1bn hit related to its Chinese banking business. An investigation into its Swiss private bank wouldn’t have helped sentiment, and shares were down over 4% at the time of writing. 

Matt Britzman, senior equity analyst at Hargreaves Lansdown, explained that it was “another quarter, another messy set of results for HSBC.”

Britzman continued: “Headline numbers have, once again, been skewed by one-off items, and the 29% drop in second-quarter profit before tax is a poor measure of performance,”

“HSBC took a $2.1 billion hit due to the accounting impact of dilution and impairment in its Chinese bank holding – not for the first time – but these do not affect capital levels. Underlying performance was far more encouraging, with pre-tax profit coming in comfortably ahead of consensus, driven by strong growth in wealth management.”

However, investors were more concerned about impairment charges that are becoming a regular occurrence for HSBC and shares reacted accordingly. The strong run into results would have added to the downside on Wednesday.

Taylor Wimpey was another major casualty on Wednesday, much for the same reason as HSBC. Taylor Wimpey’s underlying performance was arguably strong, with completions in the first half rising.

However, like HSBC, the impact of one-off charges weighed heavily on the housebuilders’ profits, and the net result was a £92m loss before tax for the period.

“Taylor Wimpey’s foundations have looked shaky in 2025. This morning’s profit warning, pinned on a £20m one-off charge for historic site remediation, might offer a convenient scapegoat, but even adjusted, profits are down on last year,” explained Mark Crouch, market analyst for investment platform eToro.

“As one of the UK’s largest volume housebuilders, Taylor Wimpey is heavily exposed to a market where fewer people can afford to buy. High interest rates, relentless house prices, and punitive stamp duty seem to be choking demand. Last year’s cautious optimism has all but vanished, and with completions slowing and forward sales under pressure, the group is caught between rising build costs and a shrinking buyer pool.”

Taylor Wimpet was the FTSE 100’s top faller with losses of over 6%.

BAE Systems was also among the fallers despite there being a lot to like in the defence firm’s half-year report. Sales and orders jumped significantly, and the group upgraded its guidance for the year.

An analyst even called the results’ blockbuster’.

“BAE Systems delivered a blockbuster set of first-half results, with growth across all business units, giving management the confidence to upgrade its full-year guidance,” Aarin Chiekrie, equity analyst, Hargreaves Lansdown said.

“The UK’s largest defence company manufactures heavy-duty military equipment like fighter jets, aircraft and submarines. The group’s diversified portfolio sees it win contracts from around the world, with nearly 45% of its £14.6 billion of first-half sales coming from the US. BAE looks well-positioned to tap into new funding available for some of the administration’s big-money projects, including the Golden Dome missile defence system.”

Despite strong orders and revenue growth in H1 2025, BAE Systems shares were down over 2% at the time of writing, likely due to a bout of profit-taking after a strong run in 2025. BAE Systems shares are up 54% year-to-date.

Away from FTSE 100 corporate updates, investors will be preparing for the Federal Reserve interest rate decision this evening and accompanying press conference.

BAE Systems shares slipped on Wednesday despite the defence group releasing strong first-half results driven by governments bolstering their defence spending to meet rising threats.

The group delivered a strong financial performance in H1 2025, with sales growing 11% and underlying EBIT rising 13%.

Underlying earnings per share increased 12% to 34.7p after accounting for net finance costs and taxation.

Order intake remained robust at £13.2bn across all business segments, contributing to a substantial order backlog of £75.4bn at period end. Order intake in the electronics and air segments was particularly strong.

These segments were also key drivers of higher revenues during the period.

BAE Systems shares were down 1.5% at the time of writing on Wednesday, likely due to the wider market’s step down on Wednesday rather than disappointment with BAE’s results.

“BAE Systems delivered a blockbuster set of first-half results, with growth across all business units, giving management the confidence to upgrade its full-year guidance,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“The UK’s largest defence company manufactures heavy-duty military equipment like fighter jets, aircraft and submarines. The group’s diversified portfolio sees it win contracts from around the world, with nearly 45% of its £14.6 billion of first-half sales coming from the US. BAE looks well-positioned to tap into new funding available for some of the administration’s big-money projects, including the Golden Dome missile defence system.

“Overall demand for BAE’s products and services has remained strong over the first half, helping new orders flow in and keeping the order backlog at a mammoth £75.4 billion, just shy of record levels.”

Chiekrie continued to explain that strong order intake sets BAE Systems up well for the years to come given the long lead time for delivery and revenue recognition policies.

“These orders are typically long-cycle, with programs spread over many years, giving BAE great revenue visibility. It’s these defensive characteristics in an uncertain macroenvironment that have helped boost BAE’s valuation, which now sits well above its long-run average. But with a new super cycle of defence spending underway, there could be a long runway of growth ahead if BAE can execute well.”

Housebuilder Taylor Wimpey’s first-half financial performance has been ravaged by one-off and exceptional charges that mask a resilience in underlying completions.

The firm delivered increased home completions in the first half of 2025 but posted a loss before tax of £92.1 million, down from a £99.7 million profit in the same period last year, as exceptional charges weighed heavily on results.

Taylor Wimpey shares were down 5% in early trade on Wednesday.

The company completed 5,264 homes across the group, including joint ventures, marking an 11% increase from 4,728 homes in the first half of 2024. This robust performance reflects improved demand conditions and the company’s focus on high-quality locations.

Taylor Wimpey’s increasing completions are in sharp contrast to competitors such as Barratt Redrow, who recently announced falling completions.

Costs & Charges

Group operating profit fell to £161.0 million from £182.3 million in the prior year. The decline was driven by a £20.0 million unexpected charge for principal contractor remediation works on a historical site, which the company described as an exceptional item affecting underlying performance.

Operating profit represents the company’s earnings from its core housebuilding activities before financing costs and exceptional items, making it a key measure of operational efficiency.

The shift from profit to loss was primarily caused by two significant one-off charges. Taylor Wimpey increased its cladding fire safety provision by £222.2 million, largely due to increased cavity barrier remediation work behind brickwork and render on existing developments. The company also set aside £18.0 million for costs related to Competition and Markets Authority proceedings.

These exceptional charges reflect ongoing industry-wide costs stemming from building safety reforms following the Grenfell Tower tragedy.

Taylor Wimpey Dividend

Taylor Wimpey declared an interim dividend of 4.67 pence per share, slightly down from 4.80 pence in 2024. The reduction in the dividend was in line with its ordinary dividend policy, which aims to pay out 7.5% of net assets or at least £250 million annually.

The dividend policy is designed to provide investors with a predictable income stream even during market downturns. And it’s delivering.

Since implementing this approach in 2018, Taylor Wimpey has returned £2.7 billion to shareholders.

Despite the challenging results, Taylor Wimpey maintained its full-year guidance, expecting UK completions of 10,400 to 10,800 homes and group operating profit of approximately £424 million, which reflects the additional £20.0 million charge incurred in the first half.