The Ibovespa fell about 0.5% on Monday, slipping back below the 179,000 mark, as a flight to safety and surging global energy prices—driven by the escalating conflict in the Middle East—weighed on demand for Brazilian assets. Petrobras advanced more than 3% on the back of Brent crude’s move above $100 a barrel, but the gain was not enough to counter a broad-based sell-off, led by a 2.1% drop in Vale and a 2.4% decline in Embraer.
Tighter financial conditions remain a key headwind. The latest Focus Bulletin showed an upward revision in projections for the Selic rate in 2026, to 12.13% from 12.00% just a week earlier. This more hawkish domestic rate outlook suggests that the combined risks of stagflation and regional supply shocks are prompting a more defensive positioning among investors.
Adding to concerns, the soybean harvest has reached only 51%, the slowest pace since 2020, while productivity risks in Rio Grande do Sul underscore persistent vulnerabilities in Brazil’s agricultural export engine.
