Brazil ETF EWZ Plunges 27% as Lula Wins Fourth Term
iShares MSCI Brazil ETF (EWZ) plunged 27% in premarket trading after leftist incumbent Luiz Inácio Lula da Silva won a historic fourth presidential term, reversing his first-round loss and catching markets off guard. Investors had heavily bet on right-wing senator Flávio Bolsonaro's victory, expecting aggressive spending cuts. Lula promised fiscal adjustment without specifics and prioritized his social agenda. Bolsonaro refused to concede, vowing to challenge results. Brazilian stocks, including Petrobras and major banks, fell 22-29%. The selloff was Brazil-specific, as US indices rose. Lula's win reverses Latin America's rightward political trend, a key driver of bullish Brazil positioning. EWZ fell to $31.1, near 52-week lows, erasing gains since the first-round surprise.