Ibovespa has third largest drop since start of pandemic

Ibovespa, the main index of B3, fell 13.88% on Monday (26.out.2026), after the re-election of President Luiz Inácio Lula da Silva (PT). It was the third-highest daily drop since the start of the COVID-19 pandemic and the fifth-highest since 1994, according to Elos Ayta.

The election result contradicted the expectations of part of the market, which was betting on the victory of Flávio Bolsonaro (PL), seen as more willing to promote a fiscal adjustment. The change in the outlook for economic policy led to a revaluation of Brazilian assets.

Market reacts to Lula's re-election

The re-election of President Luiz Inácio Lula da Silva (PT) surprised investors who expected the victory of Flávio Bolsonaro (PL). The defeated candidate was considered more aligned with policies of spending restraint and structural reforms.

With the confirmation of the result, financial agents began to reassess the fiscal scenario and the outlook for the Brazilian economy. Uncertainty over the conduct of economic policy has led to a strong wave of sales in the stock market.

Ibovespa closed the session with a loss of 13.88%, the largest daily percentage drop since March 2020. The movement reflects risk aversion in the face of changing expectations.

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Comparison with pandemic falls

The largest recent losses occurred in March 2020, during the advance of COVID-19. On March 12, Ibovespa fell 14.78%; on March 16, it fell 13.92%. Fear of a global recession and restrictions on economic activity have provoked a strong risk aversion.

At that time, the world was facing the beginning of the pandemic, with lockdowns and the paralysis of entire sectors. The 13.88% fall recorded on Monday was close to those observed in the worst moments of the health crisis.

The Elos Ayta survey shows that, since the beginning of the pandemic, only the two lectures of March 2020 have had falls higher than the one recorded today.

Other historical falls since 1994

On November 12, 1997, the index fell 15%, during the Asian financial crisis, which caused capital to flee emerging markets. On October 15, 2008, the decline was 11.4%, in the face of the global financial crisis aggravated by the collapse of the US bank Lehman Brothers.

Already on September 5, 1994, Ibovespa declined 10.5%, under the uncertainties of Plano Real after the departure of the then finance minister, Rubens Ricupero. These episodes show that sharp falls are often associated with confidence crises or external shocks.

The fall on Monday, although smaller than in 1997, surpassed that of 2008 and 1994, consolidating as the fifth largest since the Plano Real.

What to expect in the next few days

Volatility is expected to remain high as the market awaits concrete signs about the economic policy of the new government. The appointment of the economic team and the first fiscal measures will be decisive to calm investors.

Analysts consulted by the report did not detail projections, but the history shows that periods of political uncertainty tend to put pressure on Brazilian assets. The source did not detail possible scenarios for the upcoming talks.

The Boca no Trombone portal will continue to track financial market developments and their impacts on the real economy, especially for the Ponta Grossa and Campos Gerais region.

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