Brazil’s Morning Call for Monday, February 23, 2026

Today’s Focus

The Big Picture: The Ibovespa closed above 190,000 for the first time in history on Friday, finishing at 190,534.42 (+1.06%) — its 12th record of 2026 — as a landmark U.S. Supreme Court ruling struck down Trump’s sweeping IEEPA tariffs in a 6-3 decision. Chief Justice Roberts wrote the majority opinion, declaring the president exceeded his authority. The ruling ignited a late-session relief rally that reversed early losses caused by a dismal Q4 GDP print (1.4% vs 2.5% consensus). Vale surged 3.2%, Santander +3.1%, Bradesco PN +2.0%, and BB +2.0%. The BRL punched through R$ 5.18 for the first time since May 2024, closing at 5.1759 (−0.98%), as the DXY slipped to 97.75. In New York, the S&P 500 rose 0.69% to 6,909.51, the Nasdaq gained 0.90%, and the Dow added 231 points. Gold surged 1.67% to $5,081 on safe-haven demand, while Brent held near $71.30.

But the celebration was short-lived. Trump signed a new 10% global tariff via executive order Friday evening under Section 122 of the Trade Act of 1974 — and then raised it to 15% on Saturday morning. These tariffs carry a 150-day hard limit unless Congress extends them, and Treasury Secretary Bessent conceded the alternative authorities are “not as efficient and not as powerful.” The market enters Monday navigating two competing forces: the structural positive of the SCOTUS ruling (tariff refunds potentially exceeding $100B to importers, reduced legal uncertainty) versus the immediate negative of a 15% global tariff that takes effect almost immediately. For Brazil, the calculus tilts positive: the original IEEPA tariffs that hit Brazilian exports hardest are gone, and the replacement levy is lower. Today’s BCB Focus survey and FGV consumer confidence will set the domestic tone.

The tariff fog is the dominant variable. Markets need to parse what actually changed over the weekend. The SCOTUS ruling invalidated the IEEPA tariffs — which included reciprocal rates as high as 145% on China and 39% on Switzerland — but Trump’s replacement 15% global levy under Section 122 took effect almost immediately. The net impact for most countries is a significant reduction in effective tariff rates, but the legal uncertainty is enormous: Section 122 caps the tariffs at 150 days, the $100B+ refund question is unresolved, and the administration has launched Section 301 investigations that could take months. For Brazil specifically, the prior IEEPA tariff was higher than 15%, so the switch is a net positive for exporters. Watch how the BRL and the dólar futuro react at the open.

The data picture is mixed. Friday’s Q4 GDP at 1.4% (vs 2.5% expected) was the weakest since Q1 2024, weighed down by the government shutdown. But core PCE hit 3.0% — sticky enough to keep the Fed cautious. The combination of slowing growth and persistent inflation is the worst-case setup for rate-cut hopes. Fed’s Waller speaks at 8:00 ET and will be the first FOMC voice to calibrate the post-data, post-SCOTUS landscape. Domestically, the BCB Focus readout at 6:25 ET is critical: any shift in inflation expectations or Selic path consensus directly inputs to the March Copom calculus.

Friday’s session was a masterclass in narrative reversal. The Ibovespa opened weak on the GDP miss, dipped to 186,700 intraday, then surged 4,000 points from the lows after the SCOTUS ruling. The close at 190,534.42 was a gain of exactly 2,000 points — marking a new all-time closing high and the first-ever close above 190,000. Volume was massive at R$ 36.2B, amplified by options expiration. The seventh consecutive weekly gain (+2.18%) has pushed the YTD return to +18.25%. Foreign flows reached R$ 34.3B through February 18.

Bull case: The tariff overhang that had been priced in for over a year has been structurally reduced by the SCOTUS ruling. Even with Trump’s 15% replacement, the effective rate on Brazilian exports is lower. The BRL at 5.18 — its strongest since May 2024 — signals genuine conviction. Banks delivered another coordinated advance (Santander +3.1%, Bradesco +2.0%, BB +2.0%, Itaú +1.4%). The breadth of the rally suggests institutional rotation, not speculative froth. Bear case: RSI remains at 71.6 — firmly overbought. The Broadcast Bolsa poll showed 50% of professionals expect a decline this week, vs only 25% bullish. The 15% tariff Saturday escalation adds fresh uncertainty. DI futures fell across the curve Friday, which helps rate-sensitive names, but seven consecutive weekly gains is historically rare and invites mean reversion.

The post-SCOTUS landscape reshapes the Copom calculus in subtle but important ways. The structural reduction in trade barriers is a disinflationary tailwind for Brazil — lower tariffs mean cheaper imports and less pass-through pressure on the BRL. The real at 5.18, its strongest in nine months, reinforces this channel. DI futures fell 6 basis points across the curve on Friday, signaling the market sees a friendlier backdrop for the March decision.

However, the U.S. data complicates things. Core PCE at 3.0% keeps the Fed in a holding pattern, and the GDP miss to 1.4% raises stagflation concerns that could spill over into EM risk appetite. Today’s BCB Focus readout is the week’s most important domestic data point for Copom positioning — if consensus inflation expectations tick lower, it strengthens the case for a March cut. Friday’s mid-month IPCA-15 release later this week will provide the next inflation data input.

Friday was a green sweep across LatAm. The SCOTUS tariff ruling lifted all boats — Mexico’s IPC surged 0.83% as the peso benefited disproportionately from reduced tariff risk given Mexico’s massive U.S. trade exposure. Colombia’s COLCAP led the region (+1.32%) on oil-related gains and broad EM rotation. Argentina’s MERVAL gained 1.20% as the Milei reform narrative continues to attract flows. Chile’s IPSA was the laggard but still managed +0.42% as copper found support. Today’s Mexico Q4 GDP will be the key LatAm data point — a miss could temper the optimism.

Oil: Brent settled near $71.30, largely flat on the session despite CNBC reporting oil hit six-month highs intraday on Trump’s Iran warnings. The SCOTUS ruling created an unusual cross-current: reduced tariff friction (growth-positive) was offset by Trump’s immediate tariff replacement (uncertainty-negative). The Iran geopolitical premium persists but markets are recalibrating. For Brazil, Petrobras dipped 0.7% on Friday despite oil holding — possible profit-taking after the prior day’s 2.6% surge. The OPEC+ supply outlook and India’s stance on Russian crude imports remain medium-term supply-side variables.

Iron Ore: Fell to $100.26/t, the lowest level since August 2025, per GMK Center data. China remains closed for Lunar New Year and will reopen this week — the first session back will set the tone. Port inventories remain elevated, and Simandou shipments are beginning to arrive, reinforcing the structural supply overhang. Vale (+3.2% Friday) rallied on the tariff ruling rather than iron ore fundamentals — this creates a vulnerability if China’s return disappoints.

Gold: Surged 1.67% to $5,080.90, recovering strongly from the mid-February selloff. The combination of weak GDP data, geopolitical uncertainty from the tariff chaos, and potential refund-driven fiscal stimulus ($100B+ potentially flowing back to importers) all supported the safe-haven bid. Silver exploded +7.27% on the session. Gold is back above $5,000 and consolidating after the flash crash from $5,100+ earlier in the month.

DXY / BRL: The Dollar Index edged down to 97.75 (−0.06%), digesting the SCOTUS ruling which raises the specter of massive tariff refunds that could widen the fiscal deficit. The BRL punched to 5.1759 — its strongest since May 2024 — on a powerful 0.98% appreciation. The carry trade (15% Selic) plus structural EM rotation plus reduced tariff headwinds created a triple tailwind. Foreign flows hit R$ 34.3B YTD through Feb 18, with only one session of outflows (R$ 693M on Wed Feb 19) breaking a 29-session inflow streak. The dólar futuro closed at 5.182 (−0.80%). Key level: if USD/BRL breaks below 5.15, the next technical target is 5.10.

The market opens with a paradox. The biggest structural positive in months (SCOTUS tariff rollback) is paired with immediate headline risk (15% replacement tariff, 150-day clock, Section 301 investigations). Brazilian traders had a full weekend to digest the implications, and the Broadcast Bolsa poll’s 50% bearish tilt suggests the market is pricing in consolidation. The pre-market sequence matters: FGV confidence (6:00 ET) and Focus survey (6:25 ET) will set the domestic mood before the B3 opens at 10:00 AM BRT.

Key watches: (1) Vale — China reopens this week and iron ore at $100.26 is at 6-month lows; the first Dalian session will be decisive. Friday’s 3.2% rally was tariff-driven, not commodity-driven, creating a potential air pocket if restocking disappoints. (2) Banks — DIs fell across the curve Friday; if the Focus survey shows lower Selic expectations, rate-sensitive financials have room to extend. Watch Bradesco and Itaú for follow-through. (3) USD/BRL — the 5.15–5.20 range is the new battleground; a clean break below 5.15 would be the strongest BRL level in nearly two years. (4) Exporters — the tariff math matters sector by sector; companies with heavy U.S. exposure (Embraer, WEG) should benefit from the lower effective rate.

Read More from The Rio Times

• São Paulo Daily Brief for Sunday, February 22, 2026
• São Paulo Nightlife Guide for Sunday, February 22, 2026
• Brazil’s Azul Exits Chapter 11 With U.S. Rivals as Backers