Ibovespa Starts the Week in the Red

The Ibovespa fell 0.6% to close at 135,299 on Monday, as investors grappled with the prospect of a 50% US tariff on Brazilian exports, threatened alongside newly announced 30% duties on the EU and Mexico, which would directly pinch key commodity and manufacturing exporters.

Domestically, May’s IBC-Br economic activity index fell 0.7% month-on-month, marking the first contraction of the year and underscoring a sharper slowdown than economists had forecast, driven in large part by weakness in agriculture and industry.

Against this backdrop, corporate heavyweight stocks from Petrobras and Vale to Embraer have come under pressure, Petrobras fell 0.8% on concerns about fuel demand and refining margins, Vale dropped 1.3% on softer iron-ore prices, and Embraer was hit by looming aircraft tariffs, while financials have struggled amid tighter credit growth and talk of expanding the IOF tax on financial transactions.