FX.co ★ Brazilian Markets Fall Amid US Trade Tensions and Political Turmoil

On Friday, the Ibovespa index experienced a decline of 0.5%, dropping below the 135,000 mark. This downturn came as investors reacted to Brazil's approach to the recent decision by the United States to implement a 50% tariff on Brazilian goods. President Lula labeled this action as "unacceptable blackmail," asserting Brazil's autonomy over its digital policy—one of the reasons cited by US President Trump for imposing the tariffs. This decision came in the wake of a letter from Trump, who linked the tariffs to the ongoing trial of former President Jair Bolsonaro concerning an attempted coup. In Brasília, the Federal Police carried out search and seizure operations, along with imposing precautionary measures against Bolsonaro on the same day. Stocks of companies heavily reliant on US demand saw further declines, with Vale decreasing by 0.2%, Embraer by 0.1%, CSN by 0.8%, and Petrobras by 0.4%; Gerdau remained stable. The major banks were also affected, with Banco do Brasil dropping 0.7% and Bradesco falling by 1.4%.