ASX Holds Near Record Territory as Xero Raises Guidance and Nvidia Uncertainty Tests Global Technology Sentiment

Australian equities: what moved the ASX 200?

Australian shares finished Thursday, 12 November, slightly lower, with the S&P/ASX 200 falling 6.40 points, or 0.07%, to close at 9,146.80. The benchmark had finished the previous session at 9,153.20, leaving the market close to its recent highs despite a more cautious trading environment.

The session was characterised by competing forces, with banking stocks helping offset weakness among miners. Global technology sentiment also remained fragile following renewed concerns surrounding Nvidia's leadership and the sustainability of the artificial intelligence investment cycle.

Xero (ASX: XRO) was a major corporate focus after releasing its first-half FY27 results. Revenue increased 46% to NZ$1.745 billion, although this figure includes the contribution from its Melio acquisition. On a pro-forma basis, revenue increased 27%, while adjusted EBITDA rose 23% to NZ$362 million. Free cash flow reached NZ$238 million, down 26% on a reported basis, reflecting the incorporation of Melio.

Management upgraded its full-year revenue guidance to NZ$3.77 billion to NZ$3.83 billion and increased adjusted EBITDA guidance to NZ$880 million to NZ$920 million. The company also announced an on-market buyback of up to A$1 billion. The results demonstrate continued growth, although the contribution from acquisitions and the distinction between reported and underlying cash flow remain important when assessing performance.

National Australia Bank (ASX: NAB) also attracted attention after agreeing to complete approximately A$169 million in employee back-payments, interest and superannuation affecting almost 66,000 current and former employees. The bank will additionally make a A$2 million contrition payment. The issue highlights the importance of payroll governance, internal controls and operational compliance across major financial institutions.

The Australian dollar, bonds and the RBA

The Australian dollar remained sensitive to movements in the US dollar and changing expectations surrounding monetary policy. The latest available RBA reference rate placed AUD/USD at approximately US$0.6878 on Wednesday afternoon. A precise Thursday closing exchange rate has not been independently established.

The RBA's cash rate stands at 4.85%, effective from 4 November, following another 25-basis-point increase. Annual inflation reached 4.3% in September, reinforcing the central bank's concerns that price pressures remain persistent.

The latest monetary policy assessment also highlights weakening housing finance and falling housing prices. New housing loan commitments have declined substantially from their late-2025 peak, suggesting that higher borrowing costs and recent policy changes are increasingly affecting household demand.

For equity markets, the combination of elevated interest rates and softer domestic activity creates a difficult environment for property, consumer discretionary and highly leveraged businesses.

Global markets: China, Asia and Europe

Asian markets traded cautiously on Thursday, with investors weighing Wall Street's recovery against renewed uncertainty surrounding Nvidia. Japan, South Korea and Taiwan showed greater resilience, while Hong Kong remained under pressure.

China's economic outlook continues to present mixed signals. Its trade surplus exceeded US$1 trillion during the first ten months of 2026, reflecting strong export activity, particularly in technology-related products. However, export strength does not necessarily indicate a broad domestic recovery, with household consumption and property activity remaining important concerns.

For Australian companies, the distinction matters. Stronger manufacturing and infrastructure demand would support iron ore, copper and energy producers, while continued weakness in Chinese domestic activity could limit the benefits of export growth.

Wall Street: US stocks and the Federal Reserve

Wall Street delivered a strong recovery on Wednesday. The S&P 500 advanced 1.31% to 7,619.38, the Nasdaq Composite gained 1.60% to 25,466.19 and the Dow Jones Industrial Average rose 0.49% to 52,486.49. The Russell 2000 also advanced 0.9% to 2,846.26.

Technology shares led the recovery, supported by stronger-than-expected results from AI infrastructure provider CoreWeave, whose shares surged 24.7%. The performance offered some reassurance that demand for computing infrastructure remains substantial.

However, sentiment deteriorated after reports emerged that Nvidia's board was considering the position of chief executive Jensen Huang amid serious allegations and questions surrounding the company's dealings involving China. Nvidia shares subsequently fell more than 8% in after-hours trading.

These developments remain allegations and reported board deliberations, rather than a confirmed leadership change. Nevertheless, the situation introduces another source of uncertainty for a company central to the global AI investment cycle.

The Federal Reserve's policy rate remains between 3.75% and 4.00%. Markets have increasingly priced in the possibility of another rate increase in December as inflation concerns persist. US Treasury markets were closed for Veterans Day, meaning there was no new official Treasury closing yield on Wednesday.

Commodities: gold, oil and industrial metals

Commodity markets remained mixed. Gold traded below US$4,000 an ounce, reflecting pressure from a stronger US dollar and elevated interest rate expectations. Copper was around US$6.27 per pound in the latest available Wednesday trading data.

Iron ore remained near US$92 a tonne, leaving Australian bulk commodity producers exposed to uncertainty surrounding Chinese industrial demand.

Oil attracted particular attention, with Brent crude futures falling approximately 1.6% to US$91.28 a barrel. Rising Saudi Arabian production and stronger Iraqi output contributed to concerns about increasing global supply.

For Australian producers, the outlook remains uneven. Stable iron ore prices provide some support, but weaker energy prices and uncertainty surrounding Chinese demand complicate the earnings outlook across the resources sector.

What to watch next

The immediate focus is whether Nvidia's governance uncertainty spreads into broader technology valuations or whether the recent weakness proves temporary. The distinction between sentiment-driven volatility and deterioration in underlying AI demand will be important.

Domestically, attention remains on inflation, the RBA's tightening cycle and evidence of weakening household demand. Xero's upgraded guidance also provides a reminder that strong company-specific earnings can still generate substantial opportunities despite a challenging macroeconomic environment.

Our assessment is that markets are increasingly selective. Strong earnings growth and technological investment remain supportive, but elevated interest rates, expensive valuations and questions about the returns from AI spending leave little room for disappointment. The next important test will be whether corporate earnings can continue to justify market expectations.