Brazil Stocks Plunge After Lula Win: EWZ Down 26% as B3 Hits Circuit Breaker

As of Mon Oct 26, 2026, 6:31 AM PT / 9:31 AM ET. Brazil's B3 stock market had opened and halted on a circuit breaker. US cash trading was in its first minutes. Quotes are TradingView unless a source is named.

Brazil voted on Sunday. By Monday's US open, several of its biggest US-listed names were down 20% or more, and São Paulo's own exchange had hit its first circuit breaker since 2020.

At 6:31 in the morning Pacific time, EWZ, the biggest US-listed Brazil ETF, was trading at 31.50. That is 26.0% below Friday's close of 42.59. XP, the Brazilian brokerage, was down 54.7%. Itaú (ITUB) was down 22.2%, Nu (NU) 21.1% and Petrobras (PBR) 14.9%.

And this time the selling wasn't only a US pre-market story. When São Paulo opened for stocks at 10:00 AM Brasília time (6:00 AM PT), the Ibovespa fell more than 10% from Friday's close and B3 suspended trading for 30 minutes. It was the first circuit breaker there since March 2020 (Folha, InfoMoney, O Globo via Bloomberg).

Brazil election results: Lula wins a fourth term

Lula won Sunday's runoff 51.8% to 48.2% over Flávio Bolsonaro, according to the Superior Electoral Court (CNBC). It is the first time since Brazil returned to direct elections in 1989 that a candidate has won the runoff after losing the first round (CNBC). Reuters called it a "shock result that defied polls."

It isn't settled in the streets either. Bolsonaro refused to concede and says he will seek to annul the result. He called a Supreme Court order extending voting by two hours "unacceptable" (Reuters via CNBC).

Why the market cared so much: investors had positioned for a Bolsonaro win, hoping for tighter government spending, after he led the first round three weeks ago (Reuters via InfoMoney). Monday unwound a lot of that.

Why Brazil stocks are down: EWZ, XP, Itaú, Nu and Petrobras

• EWZ 31.50, -26.0%. It was down 27.6% in pre-market trading at 5:48 AM PT.
• XP 13.78, -54.7% (-50.0% at 5:48 AM PT). ITUB 7.525, -22.2% (-26.6%). NU 11.96, -21.1% (-25.3%).
• PBR 22.25, -14.9% (-20.8%). ABEV 2.88, -12.7% (-16.1%). MELI 1,622.50, -10.4% (-14.8%).
• VALE 12.165, -1.9% (-4.8%). EMBJ 68.635, -3.1% (-2.6%).

Look at the spread. The banks, the broker and the fintech took the hit. The miner and the plane maker barely moved. That reads like a market pricing Brazilian policy and fiscal risk, not dumping everything with a Brazilian flag on it. Most names are a few points better than they were at 5:48 AM PT, except XP and Embraer, which are lower.

Did B3 confirm the drop? What we can and can't verify

Partly. Here is what we can source:

• B3 cash stock market: trading was suspended for 30 minutes after the Ibovespa fell more than 10% from Friday's close of 205,082.56. Reopening was scheduled as an auction around 10:30 to 10:35 Brasília time, which is 6:30 to 6:35 AM PT (Exame, B3; halt confirmed by Folha and O Globo via Bloomberg). If the loss reaches 15% after the reopening, B3 halts for an hour.
• Ibovespa futures: down as much as 19.85%, to 166,790, at about 9:36 AM Brasília time (InfoMoney). B3 raised the futures daily limit from 10% to 20% for today (Reuters).
• Brazilian real: the dollar jumped about 12% to roughly R$5.60 from R$4.993 on Friday and also hit a circuit breaker (G1, O Globo via Bloomberg). TradingView had USD/BRL at 5.5948, up 12.7%.
• Treasury auctions: Brazil's Treasury cancelled its fixed-rate and inflation-linked bond auctions for Tuesday and Thursday (InfoMoney, O Globo via Bloomberg).

What we can't verify: where the Ibovespa itself is trading right now. TradingView's feed still showed Friday's close at the time of writing, and we have no reliable quote for the reopening. So we aren't printing a cash index level.

Our read, with that caveat: this does not look like only an air pocket in thin US pre-market trading. EWZ is still down about 26% after the US open, and Brazil's own market tripped a breaker. Petrobras has recovered the most, from -20.8% to -14.9%, so we'll keep watching it as the tell.

Our Morning Board post earlier today put a checkable line on EWZ (on X): EWZ closes today above 31.87. At 6:31 AM PT it was at 31.50, 0.37 below that line. Nothing is decided until the close, and we'll grade it either way.

The US tape: a bounce after two down weeks

Back home, stocks are bouncing after back-to-back weekly losses for the S&P 500 and the Nasdaq (CNBC), and a Friday when the Dow fell more than 650 points (CNBC).

• SPY 762.51, +0.33% (Friday close 759.97, -0.52%). QQQ 706.55, +0.31%. IWM 276.45, +0.25%.
• Futures: ES 7,686.50 (+0.35%), NQ 29,222 (+0.36%), RTY 2,791.1 (+0.24%).
• Semis: SMH 531.33, +0.78%. MU +0.88% and NVDA +1.07%. CNBC tied the chip bid earlier to "the IPO filing from Anthropic, which will come out Monday, according to reports." We're citing that as reported. It isn't confirmed.
• Equal weight keeps pace: RSP +0.30% vs SPY +0.33%. Last week it was far ahead: RSP +1.47% and IWM +1.65% while SPY lost 0.85%.

WTI crude, yields, VIX and bitcoin this morning

• WTI crude $101.46, -1.75% (front-month NYMEX). Oil eased as Qatari mediators traveled to Tehran (Reuters). Energy is lagging: the XLE ETF is -0.48%. We're leaving Brent out today because sources disagree during the contract roll.
• VIX 18.74, -3.7% (Friday 19.45).
• 10-year Treasury 4.974%, down 2.5 bp, still just under 5%. 2-year 4.701%, up 1.5 bp.
• Dollar index (DXY) 101.95, +0.20%. Gold $4,010, +0.36%.
• Bitcoin $79,712, -0.41%. It has slipped under $80,000, and "bitcoin price drops below 80000" is showing up in Google autocomplete.
• Chicago Fed National Activity Index (Sep): +0.07, up from -0.08. Above zero means growth above trend.

Will the Fed raise rates this week? Polymarket odds for Oct 28

The Fed decides Wednesday, Oct 28, at 2:00 PM ET / 11:00 AM PT. Fed Chair Kevin Warsh's press conference follows at 2:30 PM ET / 11:30 AM PT. Economists expect a hold in the current 3.75% to 4.00% range, after the Fed raised rates by 25 bp in September (Reuters). Our earlier read on the Warsh Fed is here.

Here is what Polymarket had at 5:47 AM PT:

• October: no change 94.5%, +25 bp 5.5%. On 10/20 the hike odds were 14.5%. They fell to 5.5% by 10/22 (desk edge journal).
• December: +25 bp 75.5%, no change 20.5%. This is the real question.
• January: no change 68.5%, +25 bp 28.5%.
• Hikes in 2026: two hikes at 72.5% (September plus one more), one hike at 23.5% (September only, nothing more this year).
• October dissents: two dissents is the most likely outcome at 29.5%. Zero dissents is 24%.

PCE and GDP release date: Thursday, Oct 29 at 8:30 AM ET

Thursday at 8:30 AM ET / 5:30 AM PT brings Q3 GDP and September PCE together.

• Q3 GDP (advance): consensus 3.2% (prior 2.2%). Atlanta Fed GDPNow is at 3.5%. Polymarket has 3.0% or higher at 65% and 2.5% to 3.0% at 22.5%.
• Core PCE m/m: consensus 0.3% (prior 0.2%). Polymarket: 0.3% at 58%, 0.4% at 25.5%, 0.2% at 9.3%. That is about 2.7 times more weight on a hot 0.4% than on a soft 0.2%.
• Core PCE y/y: 3.1% expected. Polymarket: 3.1% at 52%, 3.0% at 29.5%.
• Headline PCE: consensus 0.5% m/m and 3.6% y/y (prior 0.3% and 3.4%).

Treat the hot core PCE skew as a lean from prediction-market traders, not a forecast.

Earnings pile on top. MSFT and GOOGL report Wednesday after the close, right after the Fed. AMZN reports Thursday after the close. Dow Jones says more than a third of the S&P 500 reports this week.

EQT and Range Resources deal: the premium is shrinking

The only finance term on Google Trends this morning is "eqt," and here's why. EQT agreed to buy Range Resources in an all-stock deal: 0.987 EQT shares for each RRC share. On Friday's close that was worth about $54.91 a share, a roughly 21% premium and about $12.8B in equity. The combined company would be the largest US natural gas producer, at more than 9 Bcfe/d, with a pro forma enterprise value above $50B and $325M in expected synergies (Seeking Alpha/Dow Jones via TradingView). Barron's framed it as "Natural Gas Is Feeding AI Data Centers."

Then the market did the math. EQT is down 4.0% at 53.39, and because the deal is all stock, the payout shrinks with it: 0.987 x $53.39 is about $52.70. RRC is up 13.6% at 51.70, a bit under that number. Both report Tuesday.

Dealer gamma: a Friday-close estimate, not refreshed

This is the desk's model from Cboe delayed chains, run before the open on Friday-close option marks. It has not been refreshed since, so treat it as a stale desk estimate, not a measured fact. We treat the gamma flip as a volatility marker, not a direction call.

• Short gamma: SPY about -$8.98B per 1% move through Friday 10/30. When dealers are short gamma, their hedging can make moves bigger.
• SPY 0DTE gamma flip: 765.7. SPY is trading below it.
• SPY put wall through Friday: 755, about 245k open interest.

We cut a system that wasn't working

One more thing, because the channel's record belongs in this story.

Our free Telegram channel used to post signals from a 9 EMA VWAP system we call Fox. It went 1 win and 3 losses in the public channel from Oct 21 to Oct 23, for -3.08R. Friday's lone signal was a QQQ 5-minute short at 705.37 that we closed on time at 704.84 for +0.16R. Every live long since 10/16 stopped out, 0 for 6.

Since Oct 13, the public channel log shows 12 Fox signals: +1.06R in wins, -5.90R in losses, a profit factor of 0.18 and a net of -4.84R. Our lab got the same answer from the other direction. On data that matches what TradingView fires, the classic Fox backtest has an out-of-sample profit factor of 0.65 (29 trades). The best variant we tested came in at 0.92, still below 1.

So on Friday at 2:04 PM PT, we pulled Fox from the public channel. Its fires are now logged privately for tracking. No Fox signals will post today. The lab also rejected five other ideas on Friday. We'd rather publish the losses than keep posting a system the numbers say has no edge.

FAQ

Why are Brazil stocks down today?

Brazil's US-listed stocks fell after Lula won the presidential runoff 51.8% to 48.2% over Flávio Bolsonaro, a result Reuters called a shock that defied polls. At about 6:31 AM PT, in the first minutes of US trading, EWZ was down 26.0% and XP down 54.7%. Brazil's B3 had also suspended stock trading for 30 minutes on a circuit breaker after the Ibovespa fell more than 10%.

Why is Petrobras stock down today?

PBR was down 14.9% at about 6:31 AM PT, after being down 20.8% in pre-market trading at 5:48 AM PT, as Brazilian assets sold off after Lula's re-election. Petrobras is the stock to watch. If it keeps recovering while the Ibovespa reopens, the drop may ease. If it slides back toward 20%, Brazil is being repriced.

How much did EWZ fall after the Brazil election?

EWZ traded at 31.50 at about 6:31 AM PT, down 26.0% from Friday's close of 42.59. It was down 27.6% in pre-market trading at 5:48 AM PT. Our Morning Board line is an EWZ close above 31.87, which is not decided until the close.

Did Bolsonaro concede?

No. Flávio Bolsonaro refused to concede and said he will seek to annul the result. He called a Supreme Court order that extended voting by two hours unacceptable, according to Reuters via CNBC.

Will the Fed raise rates this week?

Probably not. Polymarket had 94.5% on no change at the Wednesday, Oct 28 decision, which comes at 2:00 PM ET / 11:00 AM PT, and 5.5% on a 25 bp hike. December is the bigger question, with a 25 bp hike at 75.5%.

When are PCE and GDP released this week?

Both come out Thursday, Oct 29 at 8:30 AM ET / 5:30 AM PT. Consensus is 3.2% for Q3 GDP and 0.3% month over month for core PCE. Polymarket leans hot on core PCE, with 25.5% on 0.4% versus 9.3% on 0.2%.

What is the EQT and Range Resources deal?

EQT agreed to buy Range Resources in an all-stock deal at 0.987 EQT shares per RRC share, creating the largest US natural gas producer. The offer was worth about $54.91 per share at Friday's close. With EQT down 4.0% to 53.39 at about 6:31 AM PT, it was worth about $52.70, and RRC traded at 51.70.

Bottom line

Brazil's US-listed stocks repriced on a political shock, and São Paulo's market hit a circuit breaker for the first time since 2020. We can't yet say where the Ibovespa itself settles, so watch it against EWZ, and watch Petrobras. Our line is EWZ closing above 31.87. In the US, stocks are bouncing into a week with the Fed on Wednesday and GDP and PCE on Thursday.

Follow @CosAnalyst on X for the Brazil updates and the close recap, and join our free Telegram channel @CosAnalystSignals for desk updates and our graded receipts, losses included.

BOOK FACT · NOT A TICKET. This is market reporting and desk research, not a trade recommendation.

Sources: TradingView (quotes, pre-market screener, economic and earnings calendars, news via Seeking Alpha, Dow Jones/Barron's, Reuters); CNBC; Reuters via CNBC, InfoMoney, UOL and Investing.com; Folha; Exame; InfoMoney; O Globo via Bloomberg; G1; Polymarket; Cboe delayed chains (desk model); Google Trends; CosAnalyst desk edge journal, scalp lab and public channel relay log.