Ibovespa Slips Following Fed Hike

The Ibovespa fell 0.5% to close at 185,548 on Wednesday following the US Fed’s monetary policy decision and ahead of the BCB’s. The Fed raised interest rates by 25 bps and a majority of FOMC members projected another hike this year. In contrast, the BCB is expected to announce a 25bps Selic cut after market close, marking the fifth consecutive reduction and the final Copom decision before the October presidential election. Financials were mixed, with private banks edging lower, while Banco do Brasil (+2.9%), BB Seguridade (+1.2%) and Caixa (+1.4%) posted gains. Petrobras weighed on the index, tumbling 3.4% as oil prices retreated amid reports that Saudi Arabia is offering additional crude cargoes via Oman. Miners also posted losses, with Vale down 2.4% and CSN Mineração down about 2.1%, while Usiminas fell 3.4%.

The Ibovespa fell nearly 1% to trade below 186,000 on Wednesday ahead of the BCB’s monetary policy decision. The BCB is expected to announce a 25bps cut in the Selic after market close, marking the fifth consecutive reduction and the last Copom decision before the October presidential election. In contrast, the US Fed is expected to announce a 25bps rate hike later in the day, its first since 2023. The decision is being driven by persistently high inflation and rising global financing costs. Financials traded lower, with Banco do Brasil falling 2% and Bradesco shedding more than 0.5%. Petrobras fell more than 1% as oil prices retreated amid signs of rising US inventories and reports that Saudi Arabia is offering additional crude cargoes via Oman. Other notable laggards included Ambev and WEG, both down about 1%.

The Ibovespa rose 0.5% to close at 186,503 on Tuesday, supported by Petrobras and financial heavyweights. Petrobras jumped 3.1% as oil prices extended their rally amid supply disruptions in the Middle East after Saudi Arabia shut down a key pipeline bypassing the Strait of Hormuz on Monday. Meanwhile, markets expect the Selic easing cycle to continue on Wednesday, with the policy rate forecast to fall to 13.75% from 14%, as recent inflation data remained within the BCB’s tolerance range. Itaú and Itaúsa rose 0.8% each, while BB Seguridade gained 1%. Gerdau jumped 3.1% and Usiminas 3.3% after Safra opened a recommendation for a long-short trade involving a long position in Gerdau and a short position in Usiminas. Gerdau was also recognized as one of the world’s most trusted companies in the “World’s Most Trustworthy Companies 2026” ranking for the fourth consecutive year.