Ibovespa Gains on Easing Inflation Worries Amid Lower Oil Prices

The Ibovespa rose over 1% to trade above 185,000 on Wednesday, lifted by gains in major banks as inflation concerns eased with falling oil prices. Itaú and Bradesco each rose more than 1.5% as the surge in energy commodity prices stalled, reducing fears of inflation-driven delays to rate cuts. The utilities sector also advanced, with Axia over 3.%. Elsewhere, Vale and Ambev each gained about 1%, while Rede D’Or rose 2.0%. In contrast, Petrobras pared gains from the prior session amid lower oil prices.

The Ibovespa plunged 3.3% to close at 183,104 on Tuesday as a global flight from risk intensified following the death of Iran’s Supreme Leader and strikes on Gulf energy hubs. The index dived nearly 5% intraday before paring losses after President Trump’s pledge of naval escorts for tankers in the Strait of Hormuz pulled oil prices off their daily peaks. Despite this reversal, the threat of an energy-driven inflationary shock weighed heavily on the BCB’s rate-cut outlook, hammering interest-sensitive sectors. Major banks led the rout, with Itaúsa and Bradesco dropping over 4.3%, while Vale slid 4.5% on global demand fears. The mining sector saw deeper pain as Gerdau and Bradespar fell more than 5.7%. On the data front, Brazil’s 2025 GDP grew 2.3%, the slowest since the pandemic, with a stagnant 0.1% Q4 confirming a sharp loss of momentum. While Braskem and Raízen bucked the trend with gains over 2.7%, the market remains gripped by regional chaos and high credit costs.

The Ibovespa fell nearly 4% to trade below 182,500 on Tuesday as a global selloff deepened amid escalating Middle East conflict. Rising oil prices, driven by supply fears around the Strait of Hormuz, stoked inflation worries, with risks of shallower rate cut cycle now  materializing. All sectors declined except oil-related stocks.  Major banks dragged down the index, with Itaú losing over 4% and Bradesco down about 5%. Utilities also fell, with Axia losing more than 5%. Heavyweights Ambev (-3%), WEG (-3%), and Vale (-5%) dragged further. In contrast, Petrobras rose over 1.5% on higher oil prices. On the data front, Brazil’s GDP grew 2.3% in 2025, the lowest full-year rate since 2020’s 3.3% pandemic contraction.