In a day of market turbulence, the Ibovespa, Brazil’s main stock index, retreated to 123,000 points. The decline was triggered by a downturn in New York, Trump’s tariffs, and anticipation of the Copom meeting.
The Brazilian stock market extended its losses for the second consecutive day. Investors anxiously awaited the year’s first monetary policy decision by the Central Bank under Gabriel Galípolo’s leadership. Meanwhile, the U.S. Federal Reserve kept interest rates unchanged.
On Wednesday, the Ibovespa closed down 0.50% at 123,432.12 points. The U.S. dollar ended trading at R$ 5.8662, down 0.06%. This marked the longest losing streak for the American currency since March 2022.
Domestically, investors remained cautious ahead of the Copom decision. Market expectations pointed to a one percentage point increase in the Selic rate to 13.25%, in line with the Central Bank’s December guidance. The current benchmark interest rate stands at 12.25%.
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Among Ibovespa’s traded assets, heavyweight stocks drew investor attention. Vale’s shares slightly rose, reflecting its fourth-quarter operational preview. The mining giant reported a nearly 5% drop in iron ore production compared to the same period last year.
Petrobras stocks closed lower, influenced by rising fuel prices and global oil trends. Investors also awaited news from the company’s first board meeting of the year. Notably, Petrobras CEO Magda Chambriard was absent, attending a meeting about the Equatorial Margin with President Lula and the Environment Minister.
Trump’s Tariffs and Fed Decision Shake Markets: Ibovespa Dips, Dollar Weakens
In the U.S., Wall Street indices closed lower following the Federal Reserve’s decision and a drop in Nvidia shares. The Fed kept interest rates unchanged at 4.25% to 4.50%, as expected. Fed Chair Jerome Powell stated that monetary policy is well-positioned, with anchored inflation expectations.
Nvidia’s stock fell over 5% amid rumors of potential new restrictions on chip sales to China by the Trump administration. This development heightened concerns about a possible tech stock bubble burst.
The market’s reaction underscores the delicate balance between economic growth, inflation control, and geopolitical tensions. As investors navigate these challenges, the coming days may bring further volatility to global markets.