Ibovespa Rises as Trump Signals Iran War Exit

The Ibovespa rose about 2% to trade near 186,000 on Tuesday as US President Trump told aides he was willing to end military operations in Iran. The Strait of Hormuz remains largely blocked due to the conflict. Its effective closure for weeks has fueled a sharp spike in global oil and gas prices and sparked worries over generalized inflation and recession worldwide. Bond yields fell, supporting major banks: Itaú and Bradesco both gained near 2%. The utilities sector also posted gains, with Axia and Sabesp advancing nearly 2%. Meanwhile, Brazil's industrial prices fell 4.5% on an annual basis. Major industries traded higher: Vale up 1.9%, WEG up 1.7%, and Ambev up 1.7%. Also, Petrobras gained near 1% as oil quotes rose, albeit at a slower pace than in recent sessions.

The Ibovespa rose 0.5% to close at 182,514 on Monday as a rebound in the global equity market and optimism regarding potential peace talks in the Middle East supported Brazilian assets. While the index retreated from intraday highs the session remained positive following comments from President Trump about serious discussions to end operations in Iran which briefly eased the intense geopolitical risk premium. This recovery was led by industrial and utility heavyweights as WEG jumped 3.6% following its investment in battery storage systems while Sabesp climbed 2.5% amid broader strength in the sanitation sector. Central bank director Gabriel Galipolo however maintained a cautious tone noting that the current oil shock continues to push inflation expectations higher and weigh on domestic activity. Despite these headwinds blue chips like Vale and Petrobras added roughly 0.7%.

The Ibovespa rose over 1% to trade above 183,500 on Monday, tracking a global rally in equities with support from lower bond yields. Benchmark credit costs rose across the curve, taking pressure off banking stocks, which rebounded with minor gains. Bradesco was up 0.3% and Itaú was up 0.5%. Also, WEG rose nearly 5% after announcing construction of a new, battery energy storage systems manufacturing plant. Vale gained more than 2% as iron ore prices edged up, while Petrobras gained with higher oil prices. The utilities sector also traded positive, with Sabesp up 1.6% and Axia gaining over 1%