Ibovespa Falls on Rising Inflation Expectations

The Ibovespa fell 0.4% to close at 170,415 on Monday after the latest Focus survey showed inflation expectations continuing to rise. The median forecast for annual inflation in 2026 increased for the 14th consecutive week, from 5.11% to 5.30%, moving further above the BCB's upper target limit of 4.5%. Meanwhile, the median forecast for the Selic rate at the end of 2026 rose from 13.5% to 13.75%. Concerns over a more hawkish BCB weighed on banks, with Bradesco falling 0.8% and Itaú losing 0.5%. Petrobras also dragged on the index, dropping 5.1% as oil prices fell after the US and Iran announced a preliminary peace agreement that would reopen the Strait of Hormuz. In contrast, Vale climbed 2.5% as iron ore prices rose on supply concerns linked to a potential strike by BHP workers in Australia. Embraer jumped 7.1% after Azorra finalized a deal to acquire 15 aircraft.

The Ibovespa rose 1.5% to trade above 173,500 on Monday after the US and Iran announced a preliminary peace agreement aimed at ending the conflict. US President Trump said the deal would halt hostilities and reopen the Strait of Hormuz. Oil prices fell, easing concerns that an energy-driven inflation spike could trigger a hawkish shift by global central banks. Bond yields declined, reducing worries over higher borrowing costs. Banks posted gains, with Itaú and Bradesco adding nearly 2%. Other financial stocks also advanced, with Itaúsa up almost 2% and B3 rising nearly 3%. Utilities traded higher, with Axia gaining more than 2%. Vale climbed over 2% as iron ore prices rose on supply concerns linked to a potential strike by BHP workers at Australia's key iron ore hub. Elsewhere, Embraer jumped more than 6% after Azorra finalized a deal to acquire 15 aircraft. In contrast, Petrobras shed nearly 4% on lower oil prices.

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.