The Ibovespa slipped 0.8% on Friday, closing at 169,019 points, as rising bond yields, diminishing expectations for monetary easing, and intensifying tensions in the Middle East weighed on risk appetite. Iran-backed Hezbollah rejected a new ceasefire proposal for Lebanon, while Israel said it would not withdraw its troops, undermining US diplomatic efforts with Iran.
At the same time, stronger-than-expected US payrolls data pushed Treasury yields higher and reinforced the view that the Federal Reserve may keep interest rates elevated for longer. This backdrop amplified gains in Brazilian interest-rate futures. UBS also adopted a more cautious stance on Brazilian assets as the likelihood of aggressive Selic cuts receded, pointing to stronger domestic activity, higher oil prices linked to the Iran crisis, and persistent inflationary pressures.
On the corporate front, Banco do Brasil fell 1.8%, while exchange operator B3 shed 0.7%. Vale retreated 3.8% amid weaker iron ore prices, and Petrobras declined 0.9%, in line with a pullback in international oil benchmarks.