FX.co ★ Ibovespa Weighed by Hawkish Selic Outlook

The Ibovespa retreated more than 0.5% to 175,000 points on Thursday, pressured by expectations of prolonged high interest rates and renewed geopolitical tensions. Oil prices rebounded after Iran said it had attacked a US air base in response to recent US strikes, reigniting stagflation concerns and driving global bond yields higher.

On the domestic front, the IGP-M rose 0.84% in May, slightly above market forecasts, while Citi revised its year-end Selic projection to 13.75% from 13.25%. At the same time, the national unemployment rate stood at 5.8% in the moving quarter through April, below expectations and the lowest level on record for the period.

As a result, rate-sensitive stocks weighed on the index: Itaú fell more than 1%, and Bradesco declined nearly 1%. Vale lost over 0.5% amid lower iron ore prices, whereas Petrobras gained 0.4% supported by the rise in oil prices.