Brazilian Markets Spike After Bolsonaro’s First-Round Election Win

Brazil’s Markets React Favorably to Bolsonaro’s Surprise Lead in Brazil

President Luiz Inácio Lula da Silva’s tenure may be coming to an end—and markets are reacting favorably.

Key market indexes in Brazil rose significantly after Bolsonaro managed to come first during Sunday’s general election, with a victory that defied pollsters who predicted a neck-and-neck result.

According to Valor Investe, Ibovespa futures, the main performance indicator of stocks traded on B3, the largest Brazilian capital market, gained 9% as markets opened on Monday, receding to nearly 8% at the end of the session. The surge resulted in markets being halted temporarily to contain these sharp price fluctuations.

Similarly, the iShares MSCI Brazil ETF (EWZ), an index that is often used as a proxy for international investors to bet on Brazil’s stocks, surged 12% overnight.

The ETF has been featured in the portfolio of famed investor Stanley Druckenmiller, who established a large position of over 3 million shares during Q4 2025. Even now, after reducing his position, Druckenmiller holds 2.4 million EWZ shares valued at $119 million, constituting Duquesne’s ninth-largest holding.

The Brazilian real also followed suit, showing a strong performance against the U.S. dollar. The real rose nearly 5% against the U.S. currency as markets anticipate strong fiscal measures following a Bolsonaro-expected victory in the October 25 runoff, with these gains holding near 4% at the time of writing.

Jeff Grills, Head ​of Emerging Market Debt at Aegon Asset Management, told Reuters that fiscal constraint will be more likely if Bolsonaro wins, which is what Brazil needs according to his assessment. Nonetheless, he warned that markets should wait for second-round results.

“You have to be cautious, because what we have learned is voter intentions are hard to predict, and it’s difficult to draw a conclusion from a first-round result,” he stressed.

Thomas Haugaard, portfolio manager for emerging market hard currency debt at Janus Henderson Investors, assumed a similar stance. “We see a strong potential for Brazil to stabilize its credit rating in the case of a Bolsonaro win, but only expect to gain clarity when we have the final outcome ⁠of the ​second round,” he concluded.

Nonetheless, Bolsonaro’s right-wing position is expected to draw in most voters who supported candidates that failed to advance to the runoff, extending his lead. Prediction markets platforms, which are banned in Brazil, anticipated Bolsonaro’s victory in opposition to traditional polls, and also expect Bolsonaro to win the runoff and become president-elect on October 25.