The Ibovespa dropped almost 2.6% on Wednesday to close at 171,006, marking its third consecutive decline and the lowest level in roughly two months. Investors remained focused on the implications of President Lula’s election victory, amid mounting fiscal concerns and uncertainty surrounding the makeup of his economic team.
Banking shares were among the hardest hit. Santander sank 5% after reporting a 28% year-on-year decline in recurring managerial net income. Other major financial names also retreated: Bradesco fell 6.7%, Itaú slid 3.4%, Itaúsa lost 2.9%, Banco do Brasil dropped 3.2%, and B3 declined 5.1%.
Utilities weakened as well, with Axia down 5.2%. In the corporate spotlight, Ambev slipped 2.2% and Vale retreated 3% ahead of their earnings releases scheduled for Thursday. Petrobras eased 0.5% despite a rebound in international oil prices.
On the external front, the US Federal Reserve left interest rates unchanged, in line with market expectations.