Tariffs and Uncertainty Drive Ibovespa Below 138,000

The Brazilian stock market faced a sharp setback on July 9, 2025, as the Ibovespa index dropped 1.31% to close at 137,480.79 points. Official exchange data shows the US dollar rose 1.04% to R$5.5024.

The market responded to new US tariffs on Brazilian goods, announced by President Donald Trump, and ongoing concerns about Brazil’s high interest rates and inflation expectations.

The US government imposed a 50% tariff on Brazilian imports, targeting a broad range of products. This move followed earlier threats and came after US officials cited Brazil’s trade practices and political tensions.

The Brazilian government summoned the US chargé d’affaires and warned of possible reciprocal measures. The announcement triggered a selloff in stocks with significant US exposure and increased volatility across the board.

Central Bank President Gabriel Galípolo addressed the public and confirmed that the Selic rate would remain at 15%. He emphasized the institution’s commitment to the 3% inflation target and expressed discomfort with the market’s inflation expectations.

Investors interpreted these comments as a signal that interest rates will remain high for the foreseeable future, adding to the pressure on local assets.

Trading volume reached R$14.86 billion, with over 2.6 million transactions, reflecting heightened activity as investors repositioned portfolios. Export-oriented companies led the losses.

Brazilian Markets Slip Amid Production Declines

PetroReconcavo fell 4.1% after reporting a second consecutive monthly production decline. Embraer dropped 3.5% amid concerns over aircraft export tariffs.

Petrobras and Vale declined by 1.45% and 0.99%, respectively, as commodity exporters faced increased uncertainty. CSN lost 1.2% as steel exports came under threat.

Some stocks managed gains. Braskem rose 2.7% after lawmakers advanced a bill benefiting the chemical sector and as it progressed in gas supply talks.

Meliuz and Telefônica Brasil each gained 2.7% on sector resilience and defensive rotation. BRF soared 8.6% on strong earnings momentum, while CSN Mineração added 4% as materials stocks attracted selective buying.

Technical analysis of the daily Ibovespa chart reveals a break below the 50-day moving average, signaling a possible trend reversal. The MACD shows growing bearish momentum, while the RSI stands at 47.6, just above oversold territory.

Bollinger Bands indicate increased volatility, with the index touching the lower band. The next key support level sits at 137,200 points, with a further drop to 132,900 possible if selling persists.

The four-hour chart confirms short-term bearishness, with the MACD and RSI both pointing lower and price action below key moving averages. Globally, Wall Street indices closed higher, with the Nasdaq reaching a record, but Brazilian assets moved against the trend.

European markets ended in positive territory, and the German DAX set a new record. Asian markets showed mixed results, reflecting uncertainty over US trade policy.

Brazilian fundamentals remain challenging. The market’s price-to-earnings ratio stands at 9.6, with inflation at 5.32% and unemployment at 6.2%. High rates and persistent inflation expectations weigh on sentiment.

The real’s depreciation reflects capital outflows and risk aversion. The market’s direction depends on how policymakers and investors navigate these pressures in the coming days.

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