Ibovespa and dollar fall as Lula re-election hangover persists

Brazil's main stock index, the Ibovespa, closed lower on Tuesday, October 27, 2026, after a volatile session, while the Brazilian real strengthened against the dollar. The market was still reacting to President Luiz Inácio Lula da Silva's unexpected re-election victory, which had triggered a sharp sell-off the previous day. The Ibovespa fell 0.51% to 175,710 points, after briefly attempting a recovery earlier in the day. The commercial dollar dropped 1% to R$ 5.35, following its largest daily jump since 1999 on Monday. Bank of Brazil shares ended lower after a volatile day, while retailer Tenda led gains and Natura fell 6.4%. Analysts expect continued market turbulence until the new government signals fiscal responsibility commitments. Investors are closely watching the appointment of the Finance Minister and other key economic positions, as well as the government's ability to negotiate with a more conservative Congress.