FX.co ★ Ibovespa Falls as Geopolitical Tensions Escalate

The Ibovespa fell nearly 1% on Wednesday, slipping below 175,500 points amid renewed tensions in the Middle East and a broad pullback in risk assets ahead of the Federal Reserve’s policy decision. Oil prices advanced following joint US–Saudi strikes in Iraq, heightening inflation concerns. The Fed is widely expected to keep interest rates unchanged, but recent hawkish remarks from FOMC members are bolstering the likelihood of dissenting votes in favor of a hike.

Financial stocks led the losses: Itaú, Bradesco, and Itaúsa each retreated around 2%, while Santander slumped 7% after its return on equity (ROE) came in below expectations. Utilities were also under pressure, with Axia down more than 1% and Sabesp shedding 2%.

Ambev surrendered earlier gains and traded slightly lower, after having jumped as much as 16% on the back of strong profit and EBITDA figures. Industrial and healthcare names were weaker as well, with WEG down about 1% and Rede D'Or off 2.5%.

Moving in the opposite direction, Petrobras climbed nearly 2.5%, supported by the rise in oil prices and by Morgan Stanley’s reaffirmation of its Overweight rating. The bank cited expectations of robust second-quarter results following the company’s recent production update.