Lula’s re‑election triggers sharp sell‑off in Brazilian equities and ETFs
President Luiz Inácio Lula da Silva’s surprise fourth‑term victory on 26 Oct 2026 sparked a broad market sell‑off. U.S.–listed Brazilian stocks tumbled, with Petrobras ADRs falling over 20%, Nu Holdings down more than 20% and MercadoLibre losing about 10% in pre‑market trading. The iShares MSCI Brazil ETF (EWZ) plunged roughly 20% in overnight trading, while the Brazilian real futures slid nearly 10% against the dollar. Analysts linked the move to concerns over fiscal policy, higher borrowing costs and currency weakness.
Why it matters
The sell‑off erased billions of market value from Brazil‑focused holdings, notably a US$24.2 billion loss for Petrobras. Investors with exposure to EWZ or ADRs face immediate capital losses and heightened volatility in the coming weeks.
Key facts
- 1EWZ fell up to 19.63% to $34.23 in overnight trading after the election result was confirmed. mixvale.com.br
- 2Petrobras ADRs dropped 21.7% to $20.49 in pre‑market trading. investing.com
- 3Nu Holdings shares fell 23% in pre‑market trading following Lula’s win. investing.com
- 4MercadoLibre shares fell 10.8% in pre‑market trading after the election. investing.com
- 5Brazilian real futures for November 2026 delivery slid 9.97% to an implied rate of R$5.56 per US$. mixvale.com.br
- 6Petrobras market value fell to R$745.9 billion (US$135.6 billion), a 7.4% drop in reais and a US$24.2 billion loss in dollars. riotimesonline.com
Open questions
- EWZ drop is reported as 19.63%, 20%, 21%, 25%, 27% and 28%.
Summary written by AlphAI AI Desk from 20 of 21 sources. Not investment advice. Figures are as stated by the linked sources.