Ibovespa Rises on U.S. Interest Rate Cut Speculation

On Friday, the São Paulo Stock Exchange’s benchmark index, Ibovespa, finished near 136,000 points, capping off the week with a modest day gain and an overall weekly rise of 1.23%.

The index closed at 135,608.47 points, up 0.32% from the previous session. This surge was largely fueled by international markets reacting to the anticipated reduction of U.S. interest rates in September.

In the currency sector, the Brazilian Real strengthened against the U.S. dollar, which fell by 1.99% to close at R$5.4794. Despite the day’s gain, the U.S. dollar recorded a slight weekly increase of 0.21%.

Domestically, investors priced in expectations for a renewed increase in Brazil’s basic interest rate, the Selic, following recent statements from Central Bank directors.

The market is also keenly awaiting the announcement of President Luiz Inácio Lula da Silva’s appointments for the Central Bank’s presidency and director positions.

Statements by Finance Minister Fernando Haddad hinted that the president has someone in mind for the top spot, with official announcements expected soon.

Stock Market Highlights

In the stock market, retail giant Americanas faced significant trading volatility ahead of its planned 100-to-1 stock consolidation, with shares plummeting over 28% at one point during the session.

Meanwhile, food processors in Ibovespa experienced declines, with companies like Minerva facing downturns due to the strengthening dollar.

Cyclical stocks, which are sensitive to interest fluctuations, rebounded from recent losses. Companies like Cogna, Eztec, and Lojas Renner made notable gains.

Among the major players, Vale saw its shares drop in response to over a 2% decrease in iron ore prices in Dalian, China.

On the other hand, Petrobras achieved a slight increase, supported by positive oil market performance.

This week, Petz led the Ibovespa gains following news of its merger with Cobasi, while RD Saúde recorded the most significant drop.

Internationally, Federal Reserve Chairman Jerome Powell’s remarks at the Jackson Hole Symposium highlighted a forthcoming shift in U.S. monetary policy.

Powell’s speech bolstered expectations for a rate cut, influencing financial markets globally.

Traders now estimate a 65.5% chance of a 0.25% rate cut in the upcoming Fed meeting on September 17–18. This marks a decrease from the 76% probability noted the day before.

New York’s stock indices also ended the week on a high note.

• S&P 500: up 1.15% at 5,634.61 points;
• Dow Jones: up 1.14% at 41,175.08 points;
• Nasdaq: up 1.47% at 17,877.79 points.

Overall, the week showed positive momentum in both U.S. and Brazilian markets, responding dynamically to the evolving economic landscape.

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