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EWZVery BearishMarket Recapnews

High materiality9/10

Lula Victory Triggers Brazil Equity Selloff; EWZ Near-Term Outlookbearish

Oct 26, 2026, 8:24 AM EDT1 sourcesAI-analyzed

Why it may matterVerify against the original reporting

Surge in risk-off sentiment after Lula victory caused outsized premarket drops across Brazil-focused ETFs and key Brazilian names, signaling likely continued volatility and potential further downside until policy clarity improves.

AI summary

What happened, with direct paths to the underlying reporting

Brazilian equities sold off in premarket trading as Lula da Silva won the runoff, fueling concerns about fiscal policy and debt trajectory. EWZ plunged about 27% and FLBR around 22%, with Petrobras and MercadoLibre also sharply lower. A weaker BRL may amplify losses for U.S. investors, while technical levels around $30 support and $38 resistance frame near-term risk and potential relief rallies.

Lula wins runoff, triggering fiscal-policy uncertainty. Investors reassess Brazil's debt trajectory.
EWZ down 27.3%, FLBR down 21.6% premarket.
Petrobras -20%, MELI -11% premarket.
BRL weakness compounds USD-denominated losses.
Near-term support around $30; resistance near $38.

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