Ibovespa Marks Historic High

The Ibovespa jumped 1.7% to close at a record 171,497 on Thursday after President Donald Trump withdrew threats of military strikes against Iran, easing geopolitical concerns. The reversal came just hours before the strikes were expected to take place, as negotiations with Iran reportedly advanced to the highest levels of the country's leadership and received backing from a broad coalition of regional powers. Oil prices fell on the news, easing inflation concerns and pushing bond yields lower. Financials led gains, with Itaú rising 2.9% and Bradesco adding 2.4%. Vale gained 1.4% after inaugurating its first AI-powered high-tech plant. Utilities also advanced, with Axia up 3.4% after completing the assignment of credits held against Amazonas Energi, while Engie jumped 3.9% after approving a share offering linked to its planned acquisition of a stake in the Jirau hydroelectric plant. In the services sector, Rede D'Or climbed 4.7% after completing its third share buyback program.

The Ibovespa edged up to trade near the 169,000 mark on Thursday, supported by gains in the utilities and services sectors. Axia (+1.5%) completed the assignment of credits held against Amazonas Energia in a transaction valued at R$554.1 million, while Engie (+3%) approved a share offering linked to its planned acquisition of a stake in the Jirau hydroelectric plant and suspended guidance as the deal progresses. In the services sector, Rede D'Or gained more than 2.5% after data showed Brazil’s services activity expanded 1.2% in April. Meanwhile, US President Trump said Washington would strike Iran again and increased pressure on Tehran to reach a deal by threatening to take control of key energy infrastructure. Despite the renewed rhetoric, oil prices declined, pushing bond yields lower and easing concerns over energy-driven inflation. Major banks advanced, with Bradesco and Itaú both up 0.5%.

The Ibovespa fell 0.7% to close at 168,619 on Wednesday, extending losses to its lowest level since January as escalating geopolitical tensions fueled risk aversion. US President Donald Trump warned that Washington would strike Iran “with great force” if no peace agreement is reached after Tehran downed a US helicopter near the Strait of Hormuz, raising concerns over a broader conflict. Higher crude prices pushed bond yields up and reinforced expectations of a more hawkish BCB. Market pricing now suggests a pause in the central bank's easing cycle at next week's meeting, with investors increasingly betting that the next move in interest rates will be upward. Banks traded lower, with Bradesco down 1%. WEG extended losses, falling 2.2% after reporting weaker-than-expected earnings on Tuesday. Other notable laggards included Vale (-1%), Rede D'Or (-2.5%), and Embraer (-4.2%). On the upside, Petrobras gained 1.2% on higher oil prices.