The FTSE 100 was firmly on the front foot as earnings on both sides of the pond fired up investor sentiment and offset any disappointment around the Fed chair’s hawkish tone on interest rates.

London’s leading index was trading 0.3% higher at 9,169 at the time of writing.

“Stellar results from Microsoft and Meta have fired up investors, quickly shifting the focus from US interest rates potentially staying higher for longer, to an environment where big tech is ruling the roost again,” said Russ Mould, investment director at AJ Bell.

“The probability of a US rate cut in September has fallen since the Fed’s rate decision on Wednesday, with the market now pricing in a 57% chance of rates staying level versus 35% a day ago. Normally, such a shift would be negative for investors who typically prefer rates to be trending lower. However, the big tech reporting season has got everyone excited about mega profits and tremendous earnings growth.”

US stocks sank in the close overnight, but futures rebounded sharply as Meta and Microsoft earnings broke after the bell.

In addition to strong earnings releases from US tech, UK investors were treated to a plethora of upbeat results from FTSE 100 stocks.

Rolls-Royce was the FTSE 100’s top riser after raising its profit guidance for the year following a 50% increase in operating profit in the first half.

“Rolls-Royce continues to soar above expectations, delivering yet another set of high-flying results and profit guidance upgrades. The group produces aeroplane engines for larger, long-haul planes. Revenues are being boosted by the upward trend in engine-flying hours, which are now cruising well above pre-pandemic levels,” explained Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

Rentokil Initial shares soared 9% after the pest control group maintained guidance as its US business surprised investors with rare positivity.

“Having fallen from around the 600p level two years ago, they have been trading around the 350p level in recent weeks, so Rentokil Investors could have been forgiven for feeling like the rats were getting the better treatment,” Steve Clayton, head of equity funds, Hargreaves Lansdown said.

“Today’s news that there are signs of improvement in trading at the Group’s key US Pest division was enough to rally spirits, with investors pushing the stock as much as 12% higher.”

Shell was also among the risers on the news that it would commence a fresh $3.5bn share buyback as cash generation remained robust despite lower oil prices.

Mark Crouch, market analyst for eToro, noted that “Shell delivered results that, while down on last year’s bumper profits, comfortably exceeded analyst expectations. In a weaker oil price environment, the group’s performance has been notably resilient, drawing favourable comparison with US peers rather than its more volatile UK counterpart, BP.”

Shell shares were 2% higher at the time of writing.

Amid the furore surrounding Powell’s press conference and US tech earnings releases, Trump announced that refined metals would be exempt from tariffs, sending metals futures sharply lower.

Lower metals prices translated into a weaker session for the miners as copper pure play Antofagasta tumbled 5%. Glencore, Anglo American, and Rio Tinto were all lower by more than 4%.

The FTSE 100 would likely have broken through 9,200 today if the copper tariff hadn’t been announced overnight.

Rolls-Royce shares rocketed to a fresh all-time record high on Thursday as the group reported a bumper first half and increased its profit guidance for the full year.

Rolls-Royce delivered a stellar first-half performance, with underlying operating profit surging 50% to £1.7bn despite ongoing supply chain headwinds and tariff pressures.

The British aerospace and defence giant raised its full-year guidance, now expecting underlying operating profit of £3.1bn-£3.2bn. Free cash flow guidance was also lifted to £3.0bn-£3.1bn.

“Rolls-Royce continues to soar above expectations, delivering yet another set of high-flying results and profit guidance upgrades. The group produces aeroplane engines for larger, long-haul planes. Revenues are being boosted by the upward trend in engine-flying hours, which are now cruising well above pre-pandemic levels,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“But that’s just one part of the puzzle. Layoffs, contract renegotiations, process changes, and increased use of data to drive efficiencies have put Rolls on a much healthier platform. As a result, margins have moved much higher, helping to convert the increased flying hours and revenue into profits.”

Operating margins climbed sharply to 19.1% from 14.0% in the prior year.

Civil Aerospace led the charge with margins reaching 24.9%, driven by robust aftermarket performance and improved contractual terms. Power Systems margins jumped to 15.3% as data centre demand accelerated.

Free cash flow strengthened to £1.6bn, bolstered by higher profits and continued growth in long-term service agreements. The company’s net cash position improved by £609m to £1.1bn.

Shareholders will receive an interim dividend of 4.5p per share in September. Rolls-Royce has completed £0.4bn of its planned £1bn share buyback programme, with total shareholder returns expected to reach £1.9bn through 2025 including dividends.

The engineering group said it expects to fully offset announced tariffs through mitigating actions, whilst monitoring broader economic impacts.

Rolls-Royce shares were trading up 10% at 1,095p at the time of writing.

“Rolls-Royce’s near tenfold rally since early 2023 reflects strong execution, rising profits and growing cash returns,” explained Chris Beauchamp, Chief Market Analyst at IG.

“Civil Aerospace is delivering, Power Systems is expanding fast, and Defence, which IG clients continue to expect to do well, remains a steady contributor. With SMRs offering long-term upside and cash delivery on track, the re-rating may still have legs.”

Meta shares soared in the US aftermarket following the release of earnings that obliterated analyst estimates, driven by surging advertising spending across its platforms.

Meta’s Q2 revenue came in at $47.5bn, far higher than the $44.8bn expected by analysts. EPS rocketed 38% higher to $7.14.

“Meta has knocked it out of the park. Pick your metric and Meta crushed it, from ad revenue growth to daily users, all the way down to the profit lines,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“AI is clearly delivering real-world benefits for advertisers, and they’re willing to pay more as a result. Average price per ad was up 9% over the quarter, a clear indication that Meta is delivering an improved product for both users and advertisers.”

Meta’s core ‘Daily Active People (DAP)’ metric rose again to 3.46 billion people in the quarter. This is the total number of people who used one of Facebook, Instagram, Messenger, or WhatsApp at least once during the period.

Higher ad costs and a higher number of people looking at those ads mean higher revenues and profits.

Meta made $5 billion more in net income in Q2 than the same period last year. 

So no wonder Zuckerberg is reportedly prepared to splash out over $100m on a signing-on bonus to poach a single OpenAI employee as the AI race continues unabated.

Meta’s spending on AI is mind-blowing. Not wanting to fall behind rivals, the firm has upped its guided capex spend to as much as $72bn this year. The recent acquisition of a 49% stake in Scale AI in June demonstrates their intent to ensure they are a major player in the space. 

“The broader focus now turns to Meta’s mammoth AI investment plans and whether it can continue to manage those costs without hurting earnings or free cash flow,” Britzman explained.

For now, at least, investors are more than content with surging revenues and profits. Meta shares were 10% higher at the time of writing.

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.”