Brazil's election outcome could spark major market moves depending on Lula or Bolsonaro's win

Brazil's presidential election is highly contested between leftist Lula and right-wing Bolsonaro, with markets favoring Bolsonaro due to his promise of fiscal discipline. Bolsonaro's potential win could lead to a rally in Brazilian bonds, currency, and stocks, reflecting hopes for reforms similar to those under his father, which previously boosted the market. However, Brazil faces challenges like high debt and mandatory spending, making fiscal reforms difficult. The election's outcome and the new legislature's composition will be crucial for Brazil's economic future and market performance.

The iShares MSCI Brazil ETF (EWZ) shows a market cap of $8.41 billion and a trading volume of 59,879,187 as of Oct 03, 2026, 20:21 WIB. Despite the election uncertainty, EWZ's price rose by 2.83% in one day, indicating some investor optimism. However, Pluang order activity leans heavily toward selling at 81%, suggesting caution among traders amid the contested Brazilian presidential race.