Brazilian Assets Slide After Lula Win as US Stock Futures Hold Steady
US index futures barely moved while the real fell about 12% after Lula's surprise election win in Brazil, according to Update, ahead of the Fed decision.
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what happened
US stock futures and Treasurys were little changed on Monday, while Brazilian assets sold off sharply after the surprise election victory of leftist incumbent Luiz Inacio Lula da Silva. According to Update, Dow Jones futures rose 0.4% and S&P 500 futures gained 0.3%. Yields on 10-year and 30-year Treasurys barely moved ahead of the Federal Reserve's rate decision on Wednesday, with 10-year yields staying below 5%.
The Brazilian real weakened roughly 12% against the dollar in front-month futures. The iShares MSCI Brazil ETF was on course for its worst one-day drop since at least 2000, falling more than 27% in premarket trade. Spain's Santander lost over 5%. Brent for December delivery slipped 1.4% to around $115 a barrel, while WTI fell 2% but stayed above $101. Gold held above $4,000 an ounce, and bitcoin dipped 0.4% to hover above $80,000.
why it matters
The key signal for markets is the risk hanging over Brazilian assets. ING economist Chris Turner said Lula's campaign pledges, including a shorter working week, mean investors may have to abandon hopes of fiscal consolidation. Traders are also waiting for the Fed decision and this week's earnings from large technology companies.
market impact
Brazilian assets and European banks exposed to Brazil: pressure from political risk and a weaker real
tags
instruments
sources
- Stock Futures, Treasurys Steady as Brazilian Assets Slide — Update, 26 October 2026 at 13:29 UTC
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