Ibovespa Hit by Tariff Concerns and US-IranTensions

The Ibovespa fell 2.2% to close at 170,330 on Wednesday as investors assessed escalating trade tensions with the US, fading hopes for a US-Iran peace deal, and weak domestic economic data. President Luiz Inácio Lula da Silva 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 increased geopolitical uncertainty. Domestically, Brazil's services sector nearly stagnated in May, with firms citing competitive pressures, financial constraints, and weak demand. Financial stocks led losses, with Bradesco and Itaú down 2%, while B3 tumbled 4.7%. Vale retreated 3.8% amid lower iron ore prices. Healthcare and utility shares also underperformed, with Rede D'Or falling 3.3% and Auren shedding 3.1%.

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.