Brazil's first-round surprise sends the Ibovespa to a record
Flavio Bolsonaro edged Lula in the first round. The runoff is on October 25, and the Ibovespa closed at a record.
What happened
In Brazil's first round on October 4, Flavio Bolsonaro received 47.03% of the vote and Lula 45.16% with 99.99% counted. The two meet in a runoff on October 25.
- In Brazil's first round on October 4, Flavio Bolsonaro received 47.03% and Lula 45.16% with 99.99% of votes counted. The runoff is on October 25.
Why it matters
Investors read the result as a higher chance of a market-friendly fiscal stance. Brazilian assets are sensitive to fiscal credibility, so the runoff campaign and polls will drive the real and local bonds for the next three weeks.
What history shows
In our data the Ibovespa closed at 206,912.00 on October 5, 2026, +7.70% on the day and +28.42% year to date. USD/BRL was 5.2231.
Seasonal backdrop
November has been one of the Ibovespa's two strongest months, averaging +4.67% with gains in 61% of 33 years. For USD/BRL, November has seen the real weaken on average (+2.31% in USD/BRL, up in 65% of years).
Markets in this insight
| Market | Last | Day | 1 month | Year to date | Oct average | Oct pattern |
|---|---|---|---|---|---|---|
| Ibovespa | 205,835.00 | -0.52% | +11.17% | +27.75% | +1.31% | weak |
| USD/BRL | 4.9967 | -4.33% | -2.04% | -8.76% | -0.77% | no clear pattern |
Scenarios
Momentum holds
Runoff polls confirm the first-round lead and foreign inflows continue.
- Polls with the challenger ahead
- Real strengthening
Runoff reversal
Lula gains in the runoff campaign and part of the rally unwinds.
- Polls tightening
- Real weakening
What to watch
- Runoff polls
- October 25: runoff vote