FX.co ★ Ibovespa Tumbles on Political Turmoil and Tariff Threats

The Ibovespa index experienced a decline of 1.6%, closing at 133,355 on Friday. This downturn is attributed to escalating fears of a trade war and ongoing political unrest within Brazil. Leading the losses were Petrobras shares, which fell by 1.7% following a drop in international oil prices. Concurrently, the risk of heightened tariffs from both the United States and the European Union increased. These concerns were amplified after a Federal Police operation against former president Bolsonaro provided President Trump with grounds to claim "persecution" and justify his proposed 50% tariff. Meanwhile, the Financial Times indicated that EU auto tariffs will persist at 25%. Sectors reliant on exports faced pressure, with Embraer shares decreasing by 3.2%. Furthermore, Banco Santander saw a significant drop of 4.5%. This decline is due to the bank's exposure to corporate lending linked to trade and consumer credit affected by currency fluctuations, raising alarm given the intensifying tariff rhetoric and a dimmer macroeconomic outlook. Additionally, B3 fell by 4.2%. Over the course of the week, the Sao Paulo stock exchange recorded a total decline of 2.1%.