Brazilian Market Gains on Select Tariff Exemptions and Technical Rebound

The Brazilian stock market showed cautious optimism on July 31, 2025, following the announcement from official U.S. and Brazilian government sources about new American tariffs on Brazilian goods.

President Donald Trump’s administration imposed a sweeping 50% tariff set for August 6, but exempted over 700 products, including Embraer aircraft and key commodities.

Brazilian officials confirmed these exemptions, giving exporters crucial breathing room and driving the Ibovespa higher. The Ibovespa closed at 133,989.74, up 0.95% from the previous session, posting over 1,263 points gained.

The volume on the main index remained robust, with Embraer leading activity after confirmation of the tariff exemptions. Shares of Embraer surged by over 11%.

Petrobras also advanced following stable oil prices, while Vale was among the top losers, falling more than 1.8% amid commodity volatility and concerns about slower global growth.

The real traded at R$5.5892 per dollar, showing modest depreciation that reflected both global dollar strength and risk aversion. The global context remained tense. The U.S. Federal Reserve kept interest rates steady between 4.25% and 4.50%.

This pause aligned with most analysts’ expectations but disappointed some market participants who anticipated a rate cut.

U.S. equity markets closed mixed, European indexes ended almost flat, and Asian stocks showed little direction as traders reacted to shifting trade narratives and anticipation of further central bank decisions.

Technical analysis confirms a decisive support test, with prices bouncing near the 133,000 level. Commonly used momentum indicators support this view.

The daily Relative Strength Index dropped below 40, approaching oversold territory and suggesting buyer interest is returning. The MACD, although negative, narrowed its gap, indicating that downwards momentum might be fading.

Bollinger Bands show prices hugging the lower band, underscoring elevated volatility but also opportunity for a technical rebound. Shorter four-hour charts reinforce these signals.

The index stabilized around key moving averages while early signs emerged of buyers stepping into the market. Analysis of official trading volumes confirms strong interest in both Embraer and energy stocks, while defensive outflows appeared in sectors like utilities and consumer goods.

The Global Liquidity Index NDQ, represented as a yellow line in the charts, revealed marked swings. Liquidity withdrew sharply as trade fears escalated, but stabilized after confirmation of product exemptions.

This aligns with the modest inflows observed in Brazil-focused exchange-traded funds over the last 24 hours. At the core, fundamentals show the market responding to policy-driven events and commodity price shifts.

Macroeconomics remains challenging with a stable but high Selic rate at 15% and renewed trade uncertainty. Traders and businesses will now watch closely for firm updates on U.S. trade enforcement and the Brazilian Central Bank’s upcoming policy decisions.

In summary, while tariffs weigh on sentiment, the exemption of critical exports has catalyzed a short-term market rebound.

Technical analysis, liquidity trends, and confirmed trading volumes all point to wary optimism, though fundamentals suggest persistent caution.

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