Ibovespa Slips Amid Rising US-Iran Tensions

The Ibovespa edged down to trade below 197,000 on Monday, retreating from Friday's record high as risk aversion rose following failed US-Iran peace talks over the weekend and US Navy preparations to blockade Iranian ports. Oil prices surged, reigniting inflation fears amid supply-shock risks, lifting bond yields and reviving worries over weaker credit demand and potential rate hikes, pressuring banks. Itaú lost more than 1.5%, while Bradesco and Banco do Brasil each shed near 1%. Utilities also posted losses, with Axia and Sabesp both down about 1%. Other laggards included Ambev down 1.2%, Rede D'Or down 1.4%, and WEG down 0.9%. Petrobras, however, gained nearly 2% on surging oil prices.

The Ibovespa rose about 1% to near the 197,000 mark on Friday, a new historical record, as optimism grew for a pause in Middle East hostilities and potential reopening of the Strait of Hormuz. Oil prices seesawed as Pakistan prepares to host Iranian and US delegations, while Israel and Lebanon are slated to meet in Washington next week, lifting financial stocks on hopes of de-escalation despite energy-driven inflation. Brazil’s annual inflation rose to 4.14% in March 2026 from 3.81% in February, mostly due to higher vehicle fuel prices which lifted transport costs. Itaú was up 0.5% Bradesco gained nearly 1%, utilities rose with Axia up 1% and Sabesp 3%, while WEG added near 1%, Rede D’Or climbed 1.7%, and Ambev rose 1%.

The Ibovespa rose 1% to a record 194,000, lifted by gains across energy, utilities, and major banks. Oil prices surged amid Strait of Hormuz uncertainty, boosting Petrobras and PRIO, both up over 3%, while Sabesp gained 3% on its 31.6% investment hike this year. Major banks also contributed to the rally as investors expect the US-Iran conflict to not escalate much further as it was previously believed, easing stagflation fears. Itaú gained 0.5% and Banco do Brasil near 1%. JPMorgan and Morgan Stanley’s positive assessments reinforced confidence. JPMorgan highlights Brazil’s higher beta as higher commodity prices improve the outlook for inflows, while Morgan Stanley maintains an overweight stance, citing Brazilian equities as core holdings in its Latin American portfolio. Both brokers see strong energy-sector potential, Morgan Stanley holds Petrobras as its largest Latin American position, and JPMorgan flags it and PRIO as beneficiaries of tighter global supply.