FX.co ★ Ibovespa Starts the Week in the Red

On Monday, the Ibovespa index experienced a decline of 0.6%, closing at 135,299 points. This downturn was fueled by investor concerns over a potential 50% U.S. tariff on Brazilian exports, which was suggested alongside newly imposed 30% tariffs on the European Union and Mexico. These levies are set to significantly affect major commodity and manufacturing exporters. On the domestic front, May's IBC-Br economic activity index revealed a 0.7% decline compared to the previous month, marking the first downturn of the year. This decrease was sharper than economists had anticipated, primarily due to setbacks in the agriculture and industrial sectors. Consequently, major corporations like Petrobras, Vale, and Embraer faced increased pressure. Petrobras saw a 0.8% drop amid anxieties over fuel demand and refining margins, Vale's value fell by 1.3% as iron-ore prices weakened, and Embraer was negatively impacted by the potential for aircraft-related tariffs. In addition, the financial sector struggled due to slower credit growth and discussions around the expansion of the IOF tax on financial transactions.