Ibovespa Falls as Inflation Tops Forecasts

The Ibovespa fell 0.2% to close at 171,133 on Friday as hotter-than-expected inflation data weighed on sentiment. Brazil’s annual inflation rate accelerated to 4.72% in May from 4.39%, exceeding forecasts and the BCB’s upper target, reinforcing expectations of a more hawkish stance from the central bank. Abroad, investors remained focused on US-Iran negotiations aimed at ending the conflict. While US President Donald Trump said on Thursday that an agreement could be reached as early as this weekend, Iran stated that it had yet to make a final decision. Oil prices eased amid hopes for a deal, dragging Petrobras down 1.4%. Utilities also posted losses, with Auren falling 0.4% and Sabesp shedding 0.9%. On the upside, Embraer gained 2.2% following reports of aircraft purchases by the Greek government.

The Ibovespa gained more than 0.5% to trade above 172,000 on Friday amid growing optimism over a US-Iran peace deal. Oil prices fell on reports that the two countries may sign an agreement to reopen the Strait of Hormuz on the sidelines of next week’s G7 summit, easing concerns over energy costs. Banks traded higher, with Bradesco and Banco do Brasil both gaining nearly 1%. Utilities also advanced, with Axia adding almost 1%. Rede D'Or climbed more than 1.5%, extending gains after completing its third share buyback program on Thursday, while Embraer rose over 1% following reports of aircraft purchases by the Greek government. Petrobras, meanwhile, lost more than 2% on lower oil prices. Earlier in the session, hotter-than-expected inflation data weighed on sentiment. Brazil’s annual inflation rate rose to 4.72% in May from 4.39%, exceeding forecasts and reinforcing expectations of a more hawkish stance from the BCB.

The Ibovespa jumped 1.7% to close at a record 171,497 on Thursday after President Donald Trump withdrew threats of military strikes against Iran, easing geopolitical concerns. The reversal came just hours before the strikes were expected to take place, as negotiations with Iran reportedly advanced to the highest levels of the country's leadership and received backing from a broad coalition of regional powers. Oil prices fell on the news, easing inflation concerns and pushing bond yields lower. Financials led gains, with Itaú rising 2.9% and Bradesco adding 2.4%. Vale gained 1.4% after inaugurating its first AI-powered high-tech plant. Utilities also advanced, with Axia up 3.4% after completing the assignment of credits held against Amazonas Energi, while Engie jumped 3.9% after approving a share offering linked to its planned acquisition of a stake in the Jirau hydroelectric plant. In the services sector, Rede D'Or climbed 4.7% after completing its third share buyback program.