Ibovespa Falls as Oil Rises Again

The Ibovespa fell nearly 1% to hover below 181,000 on Tuesday as oil prices rebounded and pressured the global economic outlook. Energy supply concerns resurfaced after Iran denied holding US talks to end the Gulf war, contradicting Trump's comments about a potential deal. Also, minutes from the Central Bank of Brazil showed that policymakers reiterated that the increase in oil prices may prevent the higher magnitude of rate cuts that were expected for this year. Major banks tumbled, Itaú was down 1.4%, and Bradesco nearly 2%. Utilities also fell, with Axia losing near 2% and Sabesp over 1%. In contrast, higher oil prices supported energy stocks, with Petrobras up about 3%.

The Ibovespa index surged 3.2% to close at 181,932 on Monday as a sudden shift toward diplomacy in the Middle East sparked a massive rotation back into Brazilian risk assets. This rally followed President Trump’s announcement of a five-day pause on planned military strikes against Iranian energy infrastructure, a pivot that immediately deflated the geopolitical risk premium. While previous sessions were dominated by stagflationary fears, the relief rally helped lower bond yields and supported credit-sensitive sectors across the board. Major banks traded significantly higher, with Banco Bradesco and Banco do Brasil climbing over 3.7%. Other heavyweights also saw aggressive gains, including Embraer jumping 6.6% and Localiza Rent surging 9.5% as domestic sentiment improved. Petrobras managed a marginal 0.7% gain as the broader market optimism offset the collapse in global crude prices.

The Ibovespa rose over 3% to trade above 181,000 on Monday as conciliatory remarks from US President Trump improved the outlook on global energy prices. The more moderate tone from Washington eased fears of broader escalation in the Middle East conflict, pulling down oil prices that had previously spiked and raised stagflation concerns. The drop in crude eased energy-driven inflation fears, helping lower bond yields and supporting credit-sensitive sectors. Major banks traded higher, with Bradesco up more than 3.5%. Other heavyweights, including Axia, Embraer, and Rede D'Or, also gained over 3%. Petrobras lost about 0.4% as oil prices fell.