Brazil election report · Week 41 · Oct 5 – 9, 2026
Brazil election impact
How Brazil's first-round vote moved the Brazilian companies listed in the US, and the US funds that hold them — closing prices, Fri Oct 2 to Fri Oct 9, 2026.
Summary
- Flávio Bolsonaro unexpectedly finished first in Brazil's presidential first round on Oct 4, and Brazilian stocks listed in the US jumped: the main Brazil fund (EWZ) gained 14.0% on the week.
- Companies tied to Brazilian interest rates gained most: XP +49.9%, Inter +40.1%, StoneCo +30.5%. The typical digital bank, broker or payments company gained 30.5%; the typical exporter 0.8%.
- The real rose 4.9% against the dollar, which cuts exporters' dollar sales in reais: Vale fell 1.0% and Suzano rose 0.8%.
- The broad US market barely noticed (S&P 500 +1.2%). The move showed in Brazil and Latin America funds and in MercadoLibre (+11.4%).
- The rally assumes a Bolsonaro win in the Oct 25 runoff. A swing in the polls toward President Lula before then is the one thing that would undo much of it.
What happened
Brazil's first-round vote on Oct 4 surprised markets, and Brazilian assets were repriced the next morning.
Every figure is a change over the past week, from the close on Friday, Oct 2 to the close on Friday, Oct 9, 2026. Brazilian companies trade in the US as ADRs (American depositary receipts, US-traded certificates for a foreign company's shares), priced in dollars — so the real's 4.9% rise against the dollar this week is part of every Brazilian number here.
On Sunday, Oct 4, Brazil held the first round of its presidential election. Senator Flávio Bolsonaro, the former president's eldest son, finished first, ahead of President Luiz Inácio Lula da Silva, whom polls had shown leading. Neither passed 50%, so the two meet in a runoff on Sunday, Oct 25 (CNBC, Reuters via ARY News).
Markets read the result as friendlier to investors: tighter public spending, less government pressure on state-controlled companies and, with both, lower interest rates. On Monday, Oct 5, São Paulo's main stock index hit a record, the real strengthened against the dollar, and interest-rate futures (contracts that show where traders expect rates to go) fell; the big banks led, while exporters such as Suzano and Vale fell (Benzinga, The Rio Times, BP Money, TradeMap). JPMorgan raised Brazilian stocks to overweight the same day.
In the US, where these companies trade as ADRs, the dollar bought 4.7% fewer reais by the end of the week (4.98 reais per dollar).
The 20 biggest gains
The 20 Brazilian companies listed in the US that rose most over the past week, from +49.9% to +5.7%.
| # | Ticker | Company | What it does | 1 week |
|---|---|---|---|---|
| 1 | XP | XP Inc. | Brazil's largest independent broker and investment platform | +49.9% |
| 2 | INTR | Inter&Co | Digital bank and app | +40.1% |
| 3 | STNE | StoneCo | Card payments and banking for small merchants | +30.5% |
| 4 | SBS | Sabesp | São Paulo state's water and sewage company | +25.3% |
| 5 | BBDO | Bradesco | Second-largest private bank (BBD, the other share class: +17.8%) | +24.1% |
| 6 | PAGS | PagSeguro | Payments and the PagBank digital bank | +23.7% |
| 7 | AFYA | Afya | Medical schools and software for doctors | +20.7% |
| 8 | NU | Nu Holdings | Nubank, Brazil's largest digital bank | +20.0% |
| 9 | ITUB | Itaú Unibanco | Largest private bank | +18.3% |
| 10 | BAK | Braskem | Latin America's largest petrochemical maker | +17.4% |
| 11 | PBR | Petrobras | State-controlled oil company (PBR-A, the other share class: +14.6%) | +16.9% |
| 12 | CIG | Cemig | Power company controlled by Minas Gerais state | +11.6% |
| 13 | JBS | JBS | World's largest meat processor | +11.2% |
| 14 | SID | CSN | Steel, iron ore and cement | +10.3% |
| 15 | ELPC | Copel | Paraná state's power company, privatised in 2023 | +10.3% |
| 16 | VTEX | VTEX | E-commerce software for retailers | +8.8% |
| 17 | BSBR | Santander Brasil | Third-largest private bank | +7.6% |
| 18 | ABEV | Ambev | Brazil's largest brewer | +6.7% |
| 19 | UGP | Ultrapar | Ipiranga fuel stations and cooking gas | +6.0% |
| 20 | VIV | Telefônica Brasil | Vivo mobile and broadband | +5.7% |
Why each one jumped
- XP
- The purest listed bet on Brazil's markets: more trading, more money flowing into funds and lower interest rates all lift its revenue.
- INTR
- A small digital bank whose funding gets cheaper when expected interest rates fall, and whose shares swing hard with the country's mood.
- STNE
- It borrows to pay merchants early, so its profit moves with Brazilian interest rates; it is also a bet on domestic spending.
- SBS
- Privatised in 2024 by São Paulo's governor, an ally of the Bolsonaros; a right-leaning federal government makes that deal look safer.
- BBDO
- The cheapest of the big banks and the one most exposed to falling interest rates and a recovery in lending.
- PAGS
- The same interest-rate exposure as StoneCo, in a smaller company.
- AFYA
- A small, purely domestic company; lower rates and a better economic outlook help it most (our reading).
- NU
- Consumer lending plus cheaper funding; at $78B it is too large to swing like the smaller digital lenders.
- ITUB
- Banks rose with the market on Monday; Itaú already traded at a premium to its peers, so it rose less than Bradesco.
- BAK
- Heavily indebted and still about 40% below its 150-day average, so a calmer view of Brazil's risks helps it most; Petrobras co-owns it.
- PBR
- Investors expect less political pressure on its fuel prices, dividends and investment plans.
- CIG
- State-controlled, so the market prices better odds of privatisation and less interference (our reading).
- JBS
- Probably not the vote: Brazilian coverage says meat processors sat this rally out, and it rebounded from a 52-week low set on Oct 1.
- SID
- Debt-heavy and tied to Brazilian construction, so lower rates help it more than they help pure exporters (our reading).
- ELPC
- Privatised in 2023, so it traded with Sabesp as a privatisation winner.
- VTEX
- A small Brazilian-founded software company; it moved with the domestic growth names.
- BSBR
- Mostly owned by Spain's Santander, so few of its shares trade freely and it lagged the other banks.
- ABEV
- A defensive consumer company; a stronger real makes its dollar-priced barley and aluminium cheaper.
- UGP
- A domestic fuel distributor; less political pressure on fuel prices helps, but the move was modest.
- VIV
- A regulated telecom that rarely moves much; the broad rally lifted it a little.
Checked: 24 Brazilian companies listed in the US. Weekly figures were unavailable for Embraer, Axia (formerly Eletrobras), MBRF (BRF and Marfrig) and Cosan. JBS is Brazilian-founded, but its rise does not look tied to the vote (InfoMoney).
Who rose most, and who didn't
Grouped by business, the typical one-week gain ran from +30.5% for digital banks and brokers to +0.8% for exporters.
| Group | Typical | Companies, 1 week |
|---|---|---|
| Digital banks, brokers & payments | +30.5% | XP +49.9%, INTR +40.1%, STNE +30.5%, PAGS +23.7%, NU +20.0% |
| Traditional banks | +18.3% | BBDO +24.1%, ITUB +18.3%, BSBR +7.6% |
| State-controlled & privatised | +14.2% | SBS +25.3%, PBR +16.9%, CIG +11.6%, ELPC +10.3% |
| Industry & materials | +13.8% | BAK +17.4%, SID +10.3% |
| Consumer, telecom & services | +6.3% | AFYA +20.7%, VTEX +8.8%, ABEV +6.7%, UGP +6.0%, VIV +5.7%, TIMB +0.8% |
| Exporters | +0.8% | GGB +2.2%, SUZ +0.8%, VALE −1.0% |
The gap between the top and the bottom of this chart is the story of the week. Companies whose profits depend on Brazilian interest rates and credit rose the most; companies that sell abroad in dollars barely moved.
Impact on US markets
Outside Brazil's own companies, the vote moved US-listed Brazil and Latin America funds and a handful of companies with big Brazilian businesses — not the US market as a whole.
The broad US market did not feel it. The S&P 500 rose 1.2% on the week for its own reasons, and the main emerging-markets fund (EEM) fell 1.3%, since Brazil is only a small part of it. The move showed in funds that hold Brazil or Latin America, and in a few non-Brazilian companies that earn much of their money there.
| Ticker | What it is | 1 week | Why it moved |
|---|---|---|---|
| BRZU | Brazil large caps at twice the daily move (leveraged fund) | +27.9% | Built to double each day's move in Brazilian large caps, so it roughly doubled EWZ's week. |
| BZQ | Bets against Brazil at twice the daily move (inverse fund) | −26.8% | The mirror image: it gains when Brazilian stocks fall, so it lost about as much as BRZU gained. |
| EWZS | Brazilian small companies (fund) | +24.5% | Smaller companies depend more on domestic interest rates and credit, so they beat the large-cap fund. |
| EWZ | Brazilian large and mid-size companies (the largest US Brazil fund) | +14.0% | Banks, Petrobras and Vale make up much of it; Vale's flat week held it back. |
| FLBR | Brazilian large and mid-size companies (fund) | +13.6% | A similar basket to EWZ, with a similar week. |
| MELI | MercadoLibre — Latin America's largest online store and payments company | +11.4% | Brazil is its biggest market, so it trades partly as a Brazil consumer stock (our reading). |
| DLO | dLocal — payments for global merchants selling into emerging markets | +10.8% | Brazil is among its largest markets (our reading). |
| ILF | Latin America's 40 largest companies (fund) | +9.1% | Brazil is its largest country; Mexico's companies diluted the move. |
| FLN | Latin American stocks picked by a rules-based screen (fund) | +7.6% | Brazil is part of the mix, so the move showed in a smaller dose. |
| BUD | AB InBev — the world's largest brewer | +5.3% | It owns most of Ambev, Brazil's largest brewer, and had fallen 5.9% the week before (our reading). |
Banco Santander (SAN), the Spanish parent of Santander Brasil, rose 1.0%: Brazil is one market among many for it.
How stretched the move is
After one week, the biggest risers trade well above their recent trend.
RSI, the relative strength index, compares a stock's recent gains with its recent losses on a 0–100 scale; above 70 means the price rose unusually fast. It describes the move, it does not predict the next one.
| Ticker | RSI (14 days) | Price above its 50-day average |
|---|---|---|
| XP | 90.4 | +64.2% |
| EWZS | 83.9 | +28.8% |
| SBS | 82.4 | +29.0% |
| INTR | 81.0 | +37.1% |
| PBR | 79.1 | +25.6% |
| STNE | 77.5 | +23.7% |
| ELPC | 76.5 | +18.3% |
| EWZ | 76.2 | +17.6% |
| BBDO | 70.5 | +22.1% |
| PAGS | 70.2 | +19.3% |
Readings at the close on Friday, Oct 9.
Why this part of the market moved
Three levers explain who rose and who didn't: interest rates, the state's role in business, and the currency.
The vote did not change Brazil's economy. It changed how much investors charge for Brazil's political risk.
Interest rates. Interest-rate futures fell, and at Brazil's high rates that flows straight into banks, brokers, payment companies and other domestic borrowers. The small, fast-moving names — XP, Inter, StoneCo, PagSeguro, Afya — rose two to three times as much as the big banks.
The state's role. Petrobras, Cemig, Sabesp and Copel are valued partly on how much the government decides their prices, dividends and ownership. A market-friendly government shrinks that discount.
The currency. The real rose 4.9% against the dollar. That lifts the dollar value of every Brazilian company's shares, but it cuts what exporters' dollar sales are worth in reais — which is why Vale, Suzano and Gerdau were left behind.
A swing in the polls toward President Lula before the Oct 25 runoff, or a Lula win, would put back much of the political-risk discount this week removed. A stronger dollar against the real would also cut the dollar returns of every Brazilian company listed in the US.
Scenarios
What the runoff could mean, as if → then → what to watch; no probabilities.
Bolsonaro wins the runoff
- If
- Flávio Bolsonaro wins on Oct 25.
- Then
- The market keeps pricing lower rates and less state interference; lenders, brokers and state-controlled companies hold this week's gains.
- Watch
- Interest-rate futures, the real, and the new government's first picks for the economy.
A close race
- If
- Polls stay tight into the vote.
- Then
- Prices swing with each poll; the names that rose most (XP, Inter, Sabesp) swing most in both directions.
- Watch
- Weekly polls, and whether the most stretched names cool off.
Lula recovers or wins
- If
- President Lula regains the lead or wins on Oct 25.
- Then
- Much of this week's gain is at risk, most for the companies that rose most; exporters would be hurt least, since a weaker real helps them.
- Watch
- Polls, the real against the dollar, interest-rate futures.