On Wednesday, the Ibovespa dropped 2.1%, closing at 181,708, indicating a significant reversal after attaining new record highs. This downturn was primarily attributed to substantial losses in the financial sector amidst renewed apprehensions regarding asset quality and policy indications. Banking stocks bore the brunt of the decline, highlighted by a 2.8% dip in Santander shares, despite the bank announcing increased quarterly profits. Rising delinquency rates and a challenging macroeconomic environment dampened investor sentiment. Other financial giants, including Itaú, Bradesco, Banco do Brasil, and B3, experienced declines ranging from approximately 2.6% to 4.4%. The downturn permeated sectors beyond banking, with WEG plummeting 5%, Embraer declining by 4.1%, and general weakness observed in utilities and consumer sectors. However, Vale managed to rise slightly by 0.4%, providing minimal support despite declining iron ore prices. This trading session illustrated a mixture of profit-taking following the recent rally, investor wariness precipitated by guidance from the Central Bank's monetary policy committee (Copom), and persistent fiscal concerns following the approval of new spending measures. Collectively, these factors contributed to a widespread reduction of risk in Brazilian equities.