FX.co ★ Ibovespa Extends Dowturn

The Ibovespa index declined by over 1%, dipping below the 125,500 mark on Monday. This drop extended the losses from the previous session, bringing the index to nearly a one-month low. The escalating trade tensions have ignited fears of a potential global recession. The imposition of U.S. tariffs, along with China’s 34% retaliatory tariff, has heightened these concerns, leading to a significant decrease in oil prices as investors brace for reduced global demand. The decline in oil prices poses a challenge to the revenue projections of countries dependent on commodity exports, affecting various sectors including Brazilian mining, energy, and manufacturing industries. In Brazil, the situation is further strained by decreasing foreign currency inflows and increased monetary policy pressure, with the central bank attempting to stabilize an economy that is grappling with fiscal difficulties. Leading the declines were major companies such as Petrobras (-1.2%), Vale (-2%), Ambev (-3.4%), WEG (-1.5%), and Banco do Brasil (-1.2%), alongside significant losses across most other equities.