Brazil fund rises 12.5% after Bolsonaro leads Lula into a runoff
The iShares fund of Brazilian stocks rose 12.5% on Monday, October 5, 2026, after Flávio Bolsonaro finished ahead of President Lula and the race went to an October 25 runoff.
Key takeaways
Brazilian stocks rose on Monday after Senator Flávio Bolsonaro finished ahead of President Luiz Inácio Lula da Silva, and the race went to a runoff.
The fund that holds Brazilian stocks, EWZ, rose 12.5% to $42.98. A fund of smaller Brazilian companies, EWZS, rose 14.8%, while a fund that holds the S&P 500, SPY, rose 0.7%.
With 99.99% of ballots counted, Brazil's electoral court had Bolsonaro, the son of former president Jair Bolsonaro, at 47.03% and Lula, who is seeking a fourth term, at 45.16%. Polls before the vote had generally put Lula ahead.
The index in São Paulo rose less than the dollar fund, because the real strengthened. The Ibovespa, the main index there, gained 8.1%, touched a record high of 209,606 and closed at 207,593. On the European Central Bank's afternoon reference rates, the dollar fell 4.5% against the real, to 4.98 reais.
Bolsonaro has promised big cuts to public spending, without much detail on how. Lula has used stimulus this year to cheapen consumer credit, and he often complains about Brazil's 13.75% policy rate.
"The market wants change, it wants reform, it doesn't want a high public deficit," said Pedro Galdi, an investment analyst at AGF Investments.
Vale, the iron-ore miner and the fund's largest holding, rose 2.8%. The larger gains were in financial companies, which are 34% of EWZ.
In New York, Nu Holdings, the digital bank and the second-largest holding, rose 13%, Itaú rose 15.5% and Bradesco rose 18.6%. XP, a Brazilian brokerage listed there, rose 30.9%.
Petrobras rose 11.5%. Its two share classes together outweigh Vale in the fund.
Vale lagged the banks and the broker
In 2022, the day after Jair Bolsonaro's stronger-than-expected first round, the Ibovespa jumped 5.5% and the real gained more than 4%. He lost the second round to Lula. This runoff is October 25.
Schneider and Robinson fell
Schneider Electric agreed to buy PTC for $205 a share in cash, 42.3% above Friday's close, valuing PTC's shares at about $22.6 billion. PTC rose 33.5% to $192.26, 6.2% below that cash price. The deal is expected to close by the third quarter of 2027.
Schneider said it expects to fund the cash with about €5 billion to €6 billion of new shares and about €16 billion to €17 billion of new debt. Its shares fell 10% in Paris. Jefferies analysts warned that fears artificial intelligence would disrupt software had already depressed those valuations, and could keep weighing on Schneider.
C.H. Robinson agreed to buy RXO for cash and stock, a deal the companies valued at $5.8 billion. The standard mix is $17.25 in cash plus 0.0856 Robinson shares, a package they implied at $30.25, 29% above RXO's Friday close. That $30.25 used a 16-day average Robinson price of $151.88, not Robinson's closing price on Friday. Holders can also elect all cash at $30.25, or all stock.
RXO rose 22.5% to $28.65. Robinson fell 10.8% to $140.61. At Robinson's close, the standard mix was worth $29.29, still above where RXO finished.
Both buyers sold off as the targets jumped
ETFs in this story
Frequently asked questions
Who finished ahead of Lula?
With 99.99% of ballots counted, Flávio Bolsonaro had 47.03% and Lula had 45.16%.
When is the runoff?
The runoff is October 25.
Why did the Ibovespa rise less than the dollar fund?
The real strengthened, and the dollar fell 4.5% against it, to 4.98 reais.
What happened after a similar first round in 2022?
The Ibovespa jumped 5.5% and the real gained more than 4% the day after Jair Bolsonaro's stronger-than-expected first round, and he lost the second round to Lula.
