Ibovespa Falls on Hawkish Fed Outlook

The Ibovespa fell 0.7% to close at 168,454 on Wednesday as investors assessed monetary policy decisions from the BCB and the Federal Reserve. Markets had largely expected Brazil's central bank to cut the Selic rate by 25 basis points to 14.25%, although a pause remained possible amid a worsening external backdrop, higher oil prices, and deteriorating inflation expectations. As expected, the Fed left interest rates unchanged at 3.50%-3.75% but signaled a more hawkish outlook, reinforcing expectations that borrowing costs could remain elevated for longer and weighing on risk sentiment. Banks traded mixed, with Itaú rising 0.9% while Bradesco slipped 0.6%. Utilities also posted losses, with Axia down 1.4%. Vale fell 2% amid lower iron ore prices, while WEG advanced 2.3% after approving R$438.1 million in interest on equity.

The Ibovespa edged up above the 170,000 mark on Wednesday as investors focused on monetary policy decisions from the BCB and the US Federal Reserve. Markets largely expect Brazil's central bank to cut the Selic rate by 25 basis points to 14.25%, although a pause remains possible amid a worsening external backdrop, higher oil prices, and deteriorating inflation expectations. As expected, the Fed left interest rates unchanged at 3.50%-3.75% and signaled a more hawkish outlook, reinforcing expectations that borrowing costs could remain elevated for longer. However, easing concerns over energy-driven inflation and growing expectations of a dovish stance from the BCB supported sentiment. Banks posted gains, with Itaú rising 2% and Bradesco adding 1.2%. WEG advanced nearly 3% after approving R$438.1 million in interest on equity, while Vale fell more than 1% amid lower iron ore prices.

The Ibovespa rose nearly 1% to trade close to 171,000 on Wednesday as investors focused on monetary policy decisions from the BCB and the US Federal Reserve. Markets expect Brazil’s central bank to cut the Selic rate by 0.25 percentage point to 14.25%, although a pause remains possible amid a worsening external backdrop, higher oil prices, and deteriorating inflation expectations. The Fed is holding its first meeting under the leadership of Kevin Warsh and is expected to keep its benchmark rate unchanged. Oil prices hovered near a three-month low amid prospects of the reopening of the Strait of Hormuz and the International Energy Agency warning of a supply overhang next year. Financial stocks moved higher, with Itaú Unibanco, Banco Bradesco, and Itaúsa rising nearly 1%. Utilities also advanced, with Auren Energia up more than 1%. WEG gained over 2.5% after approving R$438.1 million in interest on equity, while Vale fell more than 1.5% on lower iron ore prices.