FX.co ★ Ibovespa Falls on Inflation and Geopolitical Risks

The Ibovespa fell 0.5% on Wednesday, closing at 175,744 points, as investors digested Brazil’s latest inflation figures and kept a close eye on developments in the Middle East. Brazil’s mid-month inflation accelerated to 4.64% in May from 4.37% in April, surpassing market expectations of 4.55% and reinforcing the view that the central bank may need to keep interest rates elevated for longer.

On the geopolitical front, uncertainty persisted around a potential US–Iran agreement to end the conflict and restore energy flows through the Strait of Hormuz. The United States denied an Iranian media report claiming there was a draft interim deal that would allow traffic through the strait to return to normal within a month of the agreement taking effect. Even so, oil prices retreated, pressuring Petrobras shares, which dropped 1.4%.

Utilities also underperformed, with Axia down 1.8%. Other notable decliners included B3, which fell 2.7%, and Rede D'Or, down 1.7%. Losses on the index were partially offset by gains among major banks: Bradesco advanced 0.9% and Itaú rose 0.6%. Embraer climbed 1.5% after Bradesco BBI reiterated its buy recommendation on the stock.