Ibovespa Closes Higher as Fed Hike Bets Ease

The Ibovespa rose 0.6% to close at 172,788 on Thursday after the release of the US payroll report, the Federal Reserve’s key gauge of labor market conditions, which came in much weaker than expected. Softer job creation reduced the likelihood of further Fed rate hikes in the coming months, improving global risk sentiment. Meanwhile, oil prices eased as the gradual normalization of shipping flows through the Strait of Hormuz raised expectations of higher supply, further easing concerns over energy-driven inflation and supporting expectations of a more dovish stance from major central banks. Financial stocks led gains, with Bradesco up 0.7% and Banco do Brasil rising 1.4%. Other notable gainers included Rede D'Or (+1.5%) and Embraer (+1.5%).

The Ibovespa gained nearly 1% to trade above 173,000 on Thursday as investors reacted to weaker-than-expected US labor market data. The US economy added 57,000 nonfarm payrolls last month, well below forecasts of 110,000, reducing expectations of a Federal Reserve rate hike later this month and prompting a reassessment of the monetary policy outlook. Financial stocks posted gains, with Itaú up 1.5%, while Bradesco and Banco do Brasil advanced more than 1%. Utilities also traded higher, with Axia gaining nearly 2%. Vale rose over 1.5% as iron ore prices strengthened. Petrobras added more than 1.5% despite lower oil prices after reports that the company is preparing to enter nuclear power generation by installing a small modular reactor (SMR) at one of its refineries as part of its decarbonization strategy. Other notable gainers included Ambev (+1%), Rede D’Or (+1%), and Embraer (+1.5%).

The Ibovespa fell 0.2% to close at 171,689 on Wednesday as investors reacted to a new presidential election poll and fresh manufacturing data. An AtlasIntel/Bloomberg survey showed President Lula holding a 6.5-point lead over Flávio Bolsonaro in a hypothetical runoff, reinforcing expectations of a fiscally looser policy stance. Financial stocks were among the main drags, with Bradesco down 0.2% and Banco do Brasil losing 0.9%. WEG fell 1.4% and Ambev retreated 0.5% after the latest S&P Global manufacturing PMI showed a return to expansion, though the improvement was mainly driven by hiring and stockpiling while output and new orders remained in contraction. Utilities also traded lower, with Axia down 0.7%, while Engie plunged 6.1% after announcing the resignation of Pierre Jean Bernard Guiollot from its board of directors.