FX.co ★ Ibovespa Edges Lower on Friday

The Ibovespa index slightly declined by 0.1%, closing at 136,140 on Friday. This dip was influenced by unexpectedly strong US payroll data, which increased Treasury yields, and heightened domestic fiscal uncertainty in the run-up to discussions on alternatives to the IOF decree. Externally, robust US employment figures and climbing bond yields adversely impacted emerging markets and commodity-linked stocks. This put pressure on major exporters like Vale and Petrobras, despite a minor recovery in oil prices. The ambiguity surrounding President Trump's tariff negotiations further dampened demand prospects, negatively affecting the materials and energy sectors. Domestically, the anticipated presentation of IOF alternatives by Finance Minister Fernando Haddad raised concerns over potential increased tax burdens and fiscal instability. Additionally, the market’s anticipation of a potential interest rate hike in June posed threats to growth-sensitive industries. Consequently, major banks such as Itaú and Bradesco experienced declines amid speculation about tighter monetary policy. Retailers and airlines also saw decreases due to worries that weaker consumer spending and higher borrowing costs might reduce profits.