The Ibovespa fell more than 0.5% on Monday, slipping below 173,000 points, as renewed attacks in the Persian Gulf dampened optimism over the reopening of the Strait of Hormuz. The escalation pushed oil prices higher, reigniting stagflation fears and driving bond yields up. Financial stocks retreated on expectations of higher borrowing costs and a more hawkish monetary stance, with Santander down about 1% and Bradesco losing roughly 0.5%.
On the macro front, the S&P Global Brazil Manufacturing PMI dropped to 49.1 in May from 52.6 in April, signaling a return to contraction in industrial activity. The weaker data weighed on industrial names such as WEG, which declined nearly 1%. Vale also exerted downward pressure on the index, falling around 1.5% as iron ore prices retreated. In contrast, Petrobras advanced more than 1%, supported by the rebound in oil prices.
