The Ibovespa fell nearly 1% on Monday, slipping below 182,500 points, pressured by a renewed surge in oil prices and the latest BCB Focus survey. Oil resumed its rally after US President Donald Trump rejected Iran’s most recent proposal to reopen the Strait of Hormuz, reigniting concerns that fresh energy-driven inflation shocks could force interest rates to remain higher for longer. As yields climbed, credit-sensitive shares came under pressure.
Major banks retreated, with Itaú, Bradesco, and Banco do Brasil each losing around 1%. Utilities also declined, with Sabesp down nearly 1%. The Focus survey showed that market participants raised their 2026 inflation projection from 4.92% to 4.99%, while the end-2026 Selic rate forecast was unchanged at 13.50%.
On the political front, a new election poll indicated President Lula widening his lead over Flávio Bolsonaro, who is generally perceived by markets as more fiscally conservative. This comes against a backdrop of elevated domestic yields and subdued business activity.
In the commodities space, Vale dropped 1% amid weaker iron ore prices, while Petrobras advanced more than 1%, supported by the rise in oil.
