Ibovespa Rebounds on Thursday

The Ibovespa rose 0.4% to close at 180,271 on Thursday as domestic markets recovered following diplomatic signals that the Middle East conflict could end sooner than anticipated. Sentiment improved as Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump indicated a potential path toward a swift resolution which helped lower future interest rates. These developments provided relief to the banking sector with Banco do Brasil gaining 0.5% and Banco Santander Brazil rising 0.9% while earlier hawkish concerns from the central bank regarding the 3% inflation target persisted. Petrobras edged up 0.4% as oil prices remained elevated despite session lows while Vale fell 0.7% amid broader commodity volatility. High growth and utility names also found support as Equatorial Energia jumped over 3% and Sabesp surged 3.5% as traders recalibrated risk expectations in light of the evolving geopolitical landscape.

The Ibovespa fell 1.5% to the 177,000 mark on Thursday as the Middle East conflict and its inflation fallout drove the Brazilian central bank to abandon its guidance of rate cuts this year. The BCB delivered a 25bps, half of the earlier consensus of 50bps, and warned that war-driven energy and commodity price surges are pushing inflation projections away from the 3% target, prompting an uncertain rate outlook. Major banks posted losses, Itaú shed over 1.6%, Bradesco over 2.6%. Utilities followed, with Axia losing 2.4%. Also, Vale dropped over 3% as Chinese iron ore prices fell after state buyer restrictions eased. In contrast, Petrobras gained over 1% as oil prices extended their rally. Elsewhere, Eneva rose nearly 2% after winning 5 GW in an auction and announcing R$18.2 billion in new gas hub investments.

The Ibovespa fell 0.4% to close at 179,640 on Wednesday as investors processed the Federal Reserve's hawkish hold and pivoted toward the imminent Selic rate decision. While the Fed maintained its 3.5%–3.75% range, the focus shifted to whether the Copom will implement a 0.25 pp or 0.50 pp cut amid escalating regional tensions that pushed the commercial dollar toward R$ 5.20. Rising future interest rates and government threats to block companies violating freight rate guidelines weighed on the index despite a 2.2% gain for Petrobras following new gas reserve discoveries. Resource heavy stocks remained a drag as Vale fell 2.4% on declining iron ore prices and higher shipping costs while banking majors Bradesco and Banco do Brasil dropped over 1%. As global markets grapple with the effective closure of the Strait of Hormuz, the Brazilian market reflects deep uncertainty over how local authorities will balance growth against the 0.7% surge in US producer inflation.