Overview
- The presidential runoff that surprised markets on Monday delivered Luiz Inácio Lula da Silva roughly 51.8% of the vote, reversing the first-round lead for Flávio Bolsonaro.
- Global and local trading flashed large losses as investors sold Brazilian assets: the iShares Brazil ETF fell about 20–27% in premarket trades, Mercado Libre shares dropped around 10–15%, and Nubank plunged more than 20%.
- Currency and derivatives showed sharp stress, with a CME futures contract implying the real near 5.55 per dollar (more than a 10% move versus Friday), while B3 widened circuit-breaker bands and suspended trading when limits were hit.
- Political uncertainty rose after Jair Bolsonaro said he would not accept the result and would seek annulment, leaving investors focused on who Lula names finance minister and what concrete fiscal plans follow.
- Heavy positioning for a Bolsonaro win after the first round amplified the selloff, creating contagion across the region and hitting firms with large Brazil exposure — Mercado Libre earned about 52.6% of 2025 revenue in Brazil — with likely knock-on effects for credit costs, consumer spending, and Argentine assets.