Ibovespa Falls on Earnings Weakness

The Ibovespa fell 1.7% to close at 177,513 on Friday amid another batch of second-quarter 2026 earnings reports. Petrobras shed 3%, erasing earlier gains despite delivering one of its strongest earnings reports in recent quarters and beating expectations, as much of the strong performance had already been priced in and uncertainty remained over its sustainability. Localiza also fell 0.8% despite reporting R$1 billion in net profit, up 30.6% from a year earlier. Magazine Luiza dropped 3.7% following weak results and concerns over profitability, while Renner plunged 8.1% after cutting its guidance amid concerns about sales. Elsewhere, Vale fell 0.6% despite higher iron ore prices. Banks also declined broadly, led by Bradesco, down 2.2%, and Itaú Unibanco, which fell 2.6% ahead of the release of the Copom minutes on Tuesday, which are expected to provide further insight into the monetary authority's outlook for the Selic rate.

The Ibovespa edged lower to hover near 175,000 on Friday amid another batch of 2Q26 earnings reports. Localiza edged lower despite reporting R$1 billion in net profit, up 30.6% from a year earlier. Renner slumped 10% after cutting its 2026 net revenue guidance as sales slowed sharply during the World Cup period. Magazine Luiza also fell nearly 5% after reporting a net loss in 2Q26 almost three times larger than in 2Q25. BB Seguridade dropped 6% after its dividend cutoff date passed on Thursday, with shares now trading ex-dividend. Bradesco BBI said the company is likely to continue facing a challenging environment after its pension business disappointed, reflecting weaker financial results. In contrast, Petrobras gained over 0.5% after beating expectations, as supply disruptions linked to the US-Iran conflict lifted second-quarter prices for crude, gasoline, and diesel. Its EBITDA rose 80% year-on-year.

The Ibovespa fell 1.2% to close at 175,546 on Thursday after the BCB signaled a cautious approach to further interest rate cuts. The Copom lowered the Selic rate by 25 basis points to 14.0% on Wednesday but stopped short of signaling another cut in September, instead reiterating that future decisions will depend on incoming data. Bond yields rose as the statement emphasized the need to maintain an appropriate degree of monetary restraint to ensure inflation converges to target and highlighted elevated global uncertainty. Financial stocks posted losses, with Itaú down 1.3%, Banco do Brasil retreating 3.7%. Bradesco fell 1.9% after reporting weaker credit quality indicators. Axia erased earlier gains to close down 1% despite reporting a rebound in net profit. Major exporters also declined after Brazil posted a weaker-than-expected trade surplus, with Vale down 1.7%, Gerdau and CSN losing 2.5%, Embraer falling 1.5%, and Minerva shedding 3%.