Ibovespa falls 3% as fiscal worries and Fed decision weigh on Brazil stocks

Brazil's Ibovespa stock index fell nearly 3% on Wednesday, October 28, 2026, as post-election market adjustments continued, with investors focused on fiscal policy uncertainty and awaiting the US Federal Reserve's interest rate decision. The index dropped 2.78% to 170,828 points by midday, following a 13.88% plunge on Monday after President Lula's re-election triggered a circuit breaker. Analysts cited concerns over fiscal credibility, government spending, and the formation of the new economic team as key factors pressuring asset prices. Adding to market tension, Senator Flávio Bolsonaro flew to Miami despite a court order to surrender his passport. Investors also weighed potential taxation of tax-exempt bonds, weak bank earnings, and the Fed's policy announcement, with most sectors declining except for Petrobras shares.