Brazil stocks traded in the United States fell sharply on October 26, 2026, after President Luiz Inácio Lula da Silva won reelection in a runoff that prediction markets had heavily favored his rival to win. The iShares MSCI Brazil ETF fell 22%, while several major Brazilian companies recorded double-digit declines.

Key Takeaways

  • Lula defeated Flávio Bolsonaro by 51.8% to 48.2% in the October 25 runoff.
  • U.S.-traded Brazilian banks, Petrobras and Ambev fell sharply on Monday.
  • Kalshi and Polymarket had assigned Bolsonaro a greater than 80% chance of victory after first-round voting.

Brazil stocks fall across banks and major companies

The selloff extended beyond the iShares MSCI Brazil ETF, which trades under the ticker EWZ. U.S.-traded shares of Itaú Unibanco fell 20%, while Banco Bradesco dropped nearly 30%.

Brewer Ambev and oil producer Petrobras each declined more than 15%. The reported moves followed the election result; they do not, by themselves, establish which policy expectations or other factors drove investors to sell.

Lula wins a runoff that markets favored Bolsonaro to take

Lula secured 51.8% of the vote against 48.2% for Flávio Bolsonaro, the son of former president Jair Bolsonaro, according to Brazil’s Superior Electoral Court.

Prediction-market pricing had pointed in the opposite direction. Following the first round on October 4, both Kalshi and Polymarket gave Bolsonaro a greater than 80% chance of winning. Lula’s implied probability on Kalshi was still 21% just after 8:30 p.m. Eastern time on October 25.

Political polls, by contrast, had shown a tight race in the days before the runoff. That distinction matters: a market price reflects traders’ assessment of an outcome, rather than a survey of voters.

What prediction-market odds actually represent

Kalshi’s explanation of how contract prices are determined describes probabilities as market-assigned assessments formed through participants trading opposing views. Prices can therefore change as traders reassess an event’s likely outcome.

A low implied probability is not a prediction that an outcome cannot happen. Lula’s victory was contrary to the outcome traders favored, but a single result alone does not establish whether a platform’s probabilities are consistently reliable.

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This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.