Brazilian Markets Plunge After Lula Reelection; Dollar Jumps 8.21%

Brazilian financial markets experienced severe turbulence on Monday following President Luiz Inácio Lula da Silva's reelection, with the dollar surging 8.21% to R$5.403 and the Ibovespa index plunging 13.88% to 176,608.23 points. The stock exchange triggered a circuit breaker during the morning as the index fell over 17% to a low of 169,516.43 points, marking the largest daily drop since March 2020. Trading volume reached R$88.6 billion, far exceeding the daily average of R$25 billion. The dollar's daily gain was the largest since January 1999, though it remains down 1.57% for 2026. Investors had anticipated a victory for Flávio Bolsonaro, who led the first round, and adjusted positions following Lula's win.