Why it matters
- President Luiz Inácio Lula da Silva won Brazil's runoff on Sunday, Oct. 25, with 51.8% of the vote to 48.2% for Flávio Bolsonaro, according to the electoral court, as reported by Business Today, citing Bloomberg.
- The iShares MSCI Brazil ETF (EWZ) traded at about $30.75 at 9:02 a.m. ET Monday, down 27.8% from Friday's close of $42.59, Yahoo Finance data show. Petrobras, Itaú, Bradesco and Nu fell 21% to 29%.
- Investors had bet on a Bolsonaro win and worry about Brazil's budget. Reuters said real futures fell 10% in Asian hours and a Tokyo-listed Ibovespa fund dropped 15%.
U.S.-listed Brazilian stocks plunged before the open on Monday, Oct. 26, after President Luiz Inácio Lula da Silva won Sunday's runoff election. The iShares MSCI Brazil ETF (EWZ) traded at about $30.75 at 9:02 a.m. ET, down 27.8% from Friday's close of $42.59, according to Yahoo Finance data.
Lula won 51.8% of the vote to 48.2% for Senator Flávio Bolsonaro, with nearly all ballots counted, according to Brazil's electoral court, Business Today reported, citing Bloomberg. The Associated Press said Lula led by nearly 4.4 million votes. If confirmed by electoral authorities, it would be his fourth, non-consecutive term, starting Jan. 5, 2027.
How far did Brazilian stocks fall?
The selloff hit Brazil's biggest companies. Premarket prices at about 9:02 a.m. ET compare with Friday, Oct. 23 closes, from Yahoo Finance data.
| Stock (U.S. listing) | Fri., Oct. 23 close | Mon. premarket, approx. | Change |
|---|---|---|---|
| iShares MSCI Brazil ETF (EWZ) | $42.59 | $30.75 | -27.8% |
| Petrobras (PBR) | $26.16 | $20.60 | -21.3% |
| Itaú Unibanco (ITUB) | $9.67 | $7.12 | -26.4% |
| Banco Bradesco (BBD) | $4.07 | $2.89 | -29.0% |
| Nu Holdings (NU) | $15.16 | $11.32 | -25.3% |
Premarket trading is thin, so prices can swing before the 9:30 a.m. ET open. Brazil's Ibovespa index, which closed at 205,083 on Friday, opens at 10 a.m. in Brasília, or 9 a.m. ET.
Trading in Asia gave the first signal. Brazilian real futures for November were down 10% in Asian hours, and the Nomura NF Ibovespa Link ETF in Tokyo plunged 15%, Reuters reported. Bloomberg said the Tokyo fund fell as much as 16%, its steepest intraday drop since 2020, according to Business Today. In early spot trading, the real fell about 12% to 5.60 per dollar, Investing.com reported.
Why are Brazilian stocks falling after Lula's win?
Investors had positioned for a Bolsonaro victory, and they worry Lula will not cut spending enough. Flávio Bolsonaro led the first round on Oct. 4, which sent the Ibovespa up 7.7% to a record the next day, as we reported on Oct. 5.
By Friday, Brazilian stocks were almost 7% above their level before the first round, and the real was nearly 5% stronger against the dollar, Reuters said. Lula's team aims for a primary budget surplus of about 1.3% of GDP by 2030, while public debt already exceeds 82% of GDP, Reuters reported.
"Investors want a clear and credible commitment to fiscal discipline," Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management, told Reuters. A Citigroup survey of 73 investors, published Friday, found most expected the real to fall at least 5% after a Lula win, according to Business Today.
Is the election result being challenged?
Bolsonaro called for the result to be annulled, Business Today reported, citing Bloomberg. He said the Supreme Court changed the rules by extending voting at the last minute. Justice Cristiano Zanin extended voting by two hours after both campaigns asked for more time, the AP reported.
For more on global politics and markets, see our world news and markets sections.
Sources
- Reuters via KFGO, Investors expect Brazilian stocks, currency to fall after Lula reelected (Oct. 26, 2026)
- Business Today (citing Bloomberg), Brazil markets face sell off as Lula stuns investors with election win (Oct. 26, 2026)
- Associated Press via PBS NewsHour, Lula beats Bolsonaro in Brazil runoff, securing fourth presidential term (Oct. 25, 2026)
- Investing.com, Brazil's real weakens 12% as Lula wins reelection (Oct. 26, 2026)
- Yahoo Finance, chart data for EWZ, PBR, ITUB, BBD, NU and the Ibovespa
