Ibovespa plummets 18% in the week after Lula's re-election, and future interest rates jump from 12% to 15%

The Ibovespa closed the week with a drop of 18%, at 167,921.80 points, after Lula's re-election in the second round. According to the Giro da Bolsa program, on the Investidor Sardinha channel, the trading session following the vote opened with a 10% decline and triggered the circuit breaker, a mechanism that had not been used since the Covid-19 pandemic. The drop at the end of the day was close to 14%, the worst reaction to an election since 2002, according to the presenter.

The dollar rose from R$4.96 to R$5.37 in a few hours, the fifth biggest increase since the Real Plan, according to the program. In the same period, R$734 billion in market value left the Brazilian Stock Exchange. Retail shares, banks and most indebted companies were the hardest hit, with losses exceeding 60% in a single day. Exporters such as Vale, Raízen and Suzano rose with the rise in the American currency.

Interest, country risk and debt

Country risk increased by 26%, to the highest level since July 2025. Treasury IPCA+ recorded the second biggest increase in its history and once again approached an 8% return above inflation. Future interest jumped from 12% to 15% per year, and the presenter stated that Bradesco is already raising the real estate financing rate to the same level of 15%. According to the channel, investors' biggest fear is public debt, which reached almost 83% of GDP, combined with the political conduct of the economy and the possibility of high interest rates for longer.

At the weekly close, the program also pointed to an 8% drop in the real estate index, the dollar close to R$5.4 and a decline in Bitcoin and Ethereum.

Public accounts and tax burden

For the presenter, the fiscal environment tends to worsen. According to the channel, the CBS rate could exceed 11%, taking the VAT from the tax reform to up to 30%, above the worst market projections. The government is also considering charging IOF on investments exempt from income tax, such as LCI, LCA and CRI. The release of R$7 billion for Correios, which leads the deficit of state-owned companies, and the increase in ICMS on gasoline, diesel and cooking gas, approved by the states for 2027, also worry the market.

The program also cited an estimated R$40 billion in fiscal impact just from changes to Bolsa Família, loss of revenue from bets and benefits, not to mention proposals such as free transport on weekends. In a note with the priorities of the fourth term, according to the presenter, the PT left public accounts aside and focused on reforms of the Judiciary and the political-electoral system.

The market's expectation was for a sign of fiscal seriousness. The name of the re-elected governor of Piauí, Rafael Fonteles, described as more fiscalist, is being circulated to the Treasury. But, according to the channel, his statements about cutting privileges instead of changing social programs were poorly received.

Political scenario

Lula won with 51.8% of valid votes against 48.2%, the program reported, with around 10 million more votes than in the first round. The presenter reported that Flávio Bolsonaro left the country for the United States, despite Minister Alexandre de Moraes' decision, and that the dispute for command of the right has already begun, with Tarcísio and Eduardo Bolsonaro among the names mentioned. In the presenter's assessment, the PL was strengthened in Congress, which should make it difficult for the government to coordinate.

Among companies, Vale recorded a profit of US$1.25 billion in the third quarter, a drop of 53% over the previous year, and Petrobras broke a production record, with 2.8 million barrels per day. The oil company's shares fell 10% in the week.

Automatically translated from Portuguese.