FX.co ★ Ibovespa Poised for Sharp Weekly Losses

On Friday, the Ibovespa index experienced a significant decline of over 2.5%, dropping below the 128,000 mark, and contributing to an almost 3% loss for the week. This downturn reflects the impact of escalating trade tensions which have unsettled global markets. The implementation of U.S. tariffs, along with China's retaliatory measure of a 34% levy on U.S. goods, has prompted investors to adopt more conservative, risk-averse strategies. Key sectors such as energy and commodities have been notably affected, with Petrobras and Vale seeing declines of more than 4% and 3%, respectively, due to falling oil prices and a general decrease in commodity demand. Within Brazil, market activity has been further hindered by uncertainty regarding potential rate cuts by the Federal Reserve and the European Central Bank in the face of recession fears, compounded by geopolitical tensions and inconsistent signals from Brazilian trade policies. As investors prepare for more trade-related uncertainties that could impact global growth and demand, most equities have seen a sharp decline.