The Ibovespa, Brazil’s main stock index, reversed early February gains, closing Tuesday (11th) with a 1.69% drop at 124,380.21 points.
Stronger-than-expected U.S. inflation data, falling oil prices amid potential progress in Ukraine ceasefire talks, and significant declines in banking stocks drove the downturn. Meanwhile, the dollar ended slightly lower at R$5.7631, a 0.08% decrease.
Carrefour Brasil (CRFB3) led gains on the Ibovespa after its French parent company, Carrefour S.A., proposed converting the Brazilian retailer into a wholly owned subsidiary, signaling its potential delisting from the B3 exchange.
TIM (TIMS3) also posted gains for the second consecutive session following its announcement of a share buyback program shortly after releasing its fourth-quarter 2024 results.
However, heavyweights like Petrobras (PETR4; PETR3) and Vale (VALE3) extended losses. Petrobras mirrored declining oil prices, while Vale remained under pressure.
Among the session’s worst performers were Automob (AMOB3) and Hapvida (HAPV3), reflecting broader market challenges. Banking stocks suffered steep declines, with Bradesco (BBDC4) leading the sector’s losses.
Its shares fell 4.56%, driven by Goldman Sachs’ downgrade of its recommendation from “buy” to “sell.” Banks represent the second-largest sector by weight on the Ibovespa, amplifying their impact on the index’s overall performance.
Wall Street Reacts to Inflation Data and Powell’s Testimony
On Wall Street, U.S. markets reacted to fresh economic data and Federal Reserve Chair Jerome Powell’s testimony before Congress. The Consumer Price Index (CPI) rose 0.5% in January compared to the previous month and climbed 3% year-over-year, exceeding market expectations.
While not the Fed‘s preferred inflation gauge, the CPI remains crucial for assessing potential interest rate adjustments. Currently, U.S. interest rates sit between 4.25% and 4.50%.
Following the CPI release, financial markets shifted expectations for rate cuts in 2025, now anticipating a single 0.25 percentage point reduction delayed from June to September.
Powell acknowledged progress toward the Fed’s 2% inflation target but emphasized that more work remains to achieve it fully. Major U.S. indices reflected mixed sentiment.
The Dow Jones fell 0.50% to close at 44,368.56 points, the S&P 500 dropped 0.27% to 6,051.97 points, while the Nasdaq edged up 0.03% to finish at 19,649.95 points.
This mix of domestic and international pressures underscores growing uncertainty in global markets. Investors continue to weigh inflationary trends and geopolitical developments.
