Ibovespa Sinks on US Tariff Threat and US-Iran Tensions

The Ibovespa fell more than 1.5% to trade below 171,500 on Wednesday as investors weighed escalating trade tensions with the US, fading hopes for a US-Iran peace deal, and weak domestic economic data. President Lula convened a cabinet meeting after Washington proposed additional tariffs on imports from 60 economies, including Brazil. Meanwhile, oil prices rose as renewed hostilities in the Persian Gulf reduced expectations for a near-term easing of geopolitical tensions. On the data front, Brazil's services sector nearly stagnated in May, with companies citing competitive pressures, financial constraints, and weak demand. Banks posted losses, with Bradesco down nearly 1.5%. Healthcare and utility stocks also underperformed, as Rede D'Or fell more than 2% and Axia shed over 2%. Vale lost more than 1.5% amid lower iron ore prices.

The Ibovespa rose 1.2% to close at 174,197 on Tuesday, supported by gains in mining, steel, utility, and banking stocks. Vale advanced 4% as iron ore prices increased. Utilities also outperformed, with Axia up 2.4%, Sabesp gaining 1.5%, and Eneva rising 1.9%. In the financial sector, Bradesco added 1.5% and Itaúsa gained 1%. Steelmakers rallied after revisions to US steel tariffs, with CSN jumping 8.8%, Gerdau rising 5.5%, and Usiminas surging 8.6%. Rede D'Or gained 1.1% after announcing an expansion plan. Investors continued to assess the US proposal to impose an additional 25% tariff on a range of Brazilian imports. Members of President Lula’s administration expressed confidence that a negotiated solution could be reached before the measure takes effect, with talks expected to advance in the coming weeks. Markets also monitored developments in the Middle East as conflicting signals emerged regarding Iran's willingness to negotiate with the US.

The Ibovespa gained over 0.5% to trade above 173,000 on Tuesday, supported by gains in banking, mining, and utility stocks. Itaú and Bradesco both added 1%, while Auren and Sabesp advanced more than 1.5%. Vale rose over 2% as iron ore prices increased. Investors continued to assess the US proposal to impose an additional 25% tariff on a range of Brazilian imports. Members of President Lula’s administration believe a negotiated solution can be reached before the measure takes effect, with expectations that discussions between the two countries will advance in the coming weeks despite a US report alleging unfair trade practices by Brazil. On the geopolitical front, US President Trump said talks with Iran were ongoing, although tensions between Israel and Lebanon continued to cloud prospects for a broader regional agreement. Petrobras, meanwhile, shed nearly 2% as oil prices pulled back from recent highs.