Lula da Silva Wins Brazil Election as Markets Slump
Luiz Inácio Lula da Silva won a fourth term as Brazilian president, triggering a sharp drop in soybean futures and Brazilian equity ETFs.
President-elect Luiz Inácio Lula da Silva won the Brazilian presidential runoff on Sunday, defeating right-wing Senator Jair Bolsonaro to secure a fourth non-consecutive term. The upset victory triggered immediate volatility across global financial markets on Monday, October 26, 2026.
In Asia, exchange-traded funds tracking Brazilian stocks in China and Japan fell between 10% and 14%, with a Tokyo-listed Bovespa ETF dropping nearly 15%. The Brazilian real futures contract weakened nearly 10% against the U.S. dollar in early trade. Chicago soybean futures also hit a two-month low as investors anticipated that Lula da Silva's pragmatic engagement with China would strengthen trade ties, potentially increasing Brazil's dominance as the primary soybean supplier to China at the expense of the United States.
Investors had previously favored Jair Bolsonaro due to his promises of privatization and fiscal consolidation. Goldman Sachs warned of an extreme scenario involving a 15% drop in Brazilian equities and a 10% rise in the USD/BRL exchange rate. Analysts from the firm noted that future asset price stability will depend on the administration's approach to spending growth and the appointment of the Ministry of Finance leadership.
