Ibovespa Slips Amid US-Iran Tensions

The Ibovespa shed 0.2% to close at 173,371 as gains in banking stocks failed to offset weakness in the broader market amid concerns over further escalation in the Middle East. Oil prices swung sharply amid the worsening conflict between the US and Iran, the geopolitical risks and energy-driven inflation concerns weighed on sentiment. Utilities posted losses, with Sabesp down 0.8% and CPFL shedding 1.2%. Vale lost 1.4% as iron ore prices declined amid seasonal weakness in Chinese steel demand and narrowing mill margins. Other notable laggards included WEG (-1.1%) and Rede D'Or (-0.9%). Meanwhile, major banks advanced after the BCB's Focus survey showed the market lowered its 2026 inflation forecast for the third consecutive week. Itaú gained 0.8% and Bradesco rose 0.7%. Petrobras added 0.6% on higher oil prices.

The Ibovespa inched up to trade close to 174,000 on Monday as the BCB's Focus survey showed the market lowered its 2026 inflation forecast for the third consecutive week. The 2026 IPCA forecast was revised down to 5.15% from 5.16% a week earlier and 5.33% one month ago. The market also maintained its forecast for the benchmark Selic rate at 14.00% by the end of 2026 for the fourth consecutive week. Financials traded higher, with Itaú, Bradesco, and Itaúsa adding more than 0.5%, while Banco do Brasil gained 0.5%. Most utility stocks also posted gains, with Axia and Sabesp edging higher. Steelmakers rebounded after coming under pressure last week following the US announcement of new tariffs on Brazilian imports, with Gerdau up more than 0.5% and CSN adding nearly 1.0%. Meanwhile, lower iron ore prices weighed on miners. Vale traded muted and CSN Mineração shed more than 0.5%.

The Ibovespa inched 0.1% lower to close at 173,714 on Friday as losses in the financial sector weighed on the index, while gains in energy stocks partially offset the decline. The US and Iran intensified attacks across the Gulf, with their collapsed truce disrupting oil flows through the Strait of Hormuz. The conflict pushed oil prices higher, stoking inflation fears and weighing on financials and the broader market, while supporting energy stocks. Itaú lost 1.4%, Bradesco shed 0.6%, and both Itaúsa and Banco do Brasil retreated 1.3%, while Petrobras advanced 2.5%. Utility stocks traded mixed, with Axia up 0.9%, while Sabesp shed 0.3%. Steelmakers also traded mixed after the US announced a new 25% tariff on Brazilian imports. CSN lost 1.0%, while Gerdau added 0.5%. Meanwhile, the IBC-Br economic activity index rose 0.1% month-over-month in May 2026, easing from a 0.5% increase in the previous month but slightly exceeding forecasts for a flat reading.