FX.co ★ Ibovespa Pressured by US Tariffs

The Ibovespa index fell by 0.2%, closing at 133,526 on Friday, as it grappled with challenges stemming from rising trade-war tensions. With President Trump's impending 50% tariff on Brazilian goods looming, sectors such as agribusiness, mining, and manufacturing are preparing for significantly higher export costs. This situation is further complicated by President Lula's commitment to protect national sovereignty "at all costs" and the proactive stance of U.S. diplomats regarding strategic minerals, both of which are contributing to heightened policy uncertainty. Additionally, the U.S. is preparing emergency legal arguments to justify tariffs and has issued warnings of potential sanctions targeting Brazilian officials. Mid-July has witnessed inflation accelerating to 5.3% year-on-year, surpassing forecasts and underscoring ongoing price pressures that make immediate rate cuts from Copom unlikely. Leading the Ibovespa's decline were Vale, down 1.8%, Banco Santander, down 1.4%, and Companhia Sanea, also down 1.4%. Despite these challenges, the Ibovespa managed a slight 0.1% increase over the week.