Investors had bet on the other candidate. When Brazil's election went the other way on Sunday night, funds holding Brazilian stocks dropped in a matter of hours.
Why did Brazil's stock ETF plunge Sunday night?
The iShares MSCI Brazil ETF (EWZ) traded roughly 17% to 19% lower in thin Sunday-night trading after President Luiz Inácio Lula da Silva won Brazil's presidential runoff on Oct. 25, 2026. Investors had expected his rival, Senator Flávio Bolsonaro, to win and to cut government spending more aggressively.
Brazil's electoral court declared Lula the winner on Sunday evening, giving him a fourth, non-consecutive term, Reuters reported. With nearly all ballots counted, Lula had about 51.8% of the vote to Bolsonaro's 48.2%, according to the electoral court figures cited by Business Today. Bolsonaro called for the result to be annulled, saying the courts changed the rules by extending voting hours at the last minute.
The result was a surprise. Bolsonaro led after the first round on Oct. 4, and prediction markets Polymarket and Kalshi had given Lula only about a 20% chance of winning, according to TheStreet.
How big were the moves in Brazilian stocks and the real?
EWZ closed Friday, Oct. 23, at $42.59. In overnight trading Sunday it changed hands near $34.46, a drop of about 19%, according to Diário de São Paulo. A Stocktwits report on TradingView put the fall at more than 18%. Overnight trading has far fewer buyers and sellers than the regular session, so these prices can swing a lot before Monday's 9:30 a.m. Eastern open.
The selling spread around the world. In Tokyo, an ETF that tracks Brazil's Ibovespa stock index fell almost 15% when Japanese trading opened, Reuters noted, and Business Today, citing Bloomberg, said it fell as much as 16%, its steepest intraday drop since 2020. U.S.-listed shares of big Brazilian companies also slid in early indications on Sunday night, with Petrobras down about 10% to 12% and the bank Itaú down about 14%, according to Diário de São Paulo.
Brazil's currency, the real, took a hit too. Dollar futures…
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Compound growth estimate
Estimated total
$17,175
Your contributions
$13,000
This is an estimate, not a prediction. Monthly compounding; taxes, fees and inflation are excluded.
This article is for educational purposes only and isn't personalized financial, tax or legal advice. Consider talking with a qualified professional about your situation.
Kiara Miller — Founder & Editor
Kiara Miller is the founder and editor of The Evergreen Edit. He has been doing independent finance research for two decades and reviews every article before it's published.
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