# Brazil market volatility rises amid rate and political risk > Live situation record from CLSTR: https://clstr.news/situations/brazil-market-reaction-to-us-fed-and-middle-east-tensions > Updated: 2026-09-12T21:02:20.000Z. Sources: 147. Developments: 7. The rally that began on 30 July 2026 continued into early August, driven by a weaker U.S. dollar and easing global risk premia. A modest 0.1% rise in core U.S. PCE inflation and the Federal Reserve’s decision to keep rates unchanged lifted the real and pushed the Ibovespa up roughly 1.9% to near 177,000 points. On 5 August 2026, the Central Bank of Brazil’s monetary policy committee (Copom) cut the Selic benchmark by 0.25 percentage points to 14%. This reinforced the currency’s strength and the equity rally, even as the broader dollar index remained near the 100-point level. While Brent futures above US$ 80 a barrel improved Brazil’s terms of trade, market participants noted election-related uncertainty following presidential candidate Flávio Bolsonaro’s naming of Alfredo Gaspar as his running mate. By 11 August 2026, the market faced increased volatility. Although July IPCA inflation rose only 0.07%, exceeding expectations, the U.S. dollar rose to R$ 5.16 and the Ibovespa declined. Copom minutes released that day offered no definitive signal regarding the next interest rate decision, stating that adjustments would depend on evolving economic scenarios and potential risks from oil shocks or climate-related effects. Market sentiment was further pressured by JPMorgan, which downgraded its investment recommendation for Brazil from ‘overweight’ to ‘neutral,’ citing the approaching end of the monetary easing cycle, slowing growth, and deteriorating credit conditions. Additionally, new polling showing President Luiz Inácio Lula da Silva leading in election intentions has increased perceived risk due to fiscal concerns. This volatility saw the Ibovespa fall 2.5%, reaching its lowest level in nearly six months. By 13 August 2026, the U.S. dollar continued to strengthen against the real, reaching approximately R$ 5.19. On 21 August 2026, the Ibovespa saw a recovery, rising 1.85% to 171,031 points, marking its third consecutive day of gains. ## Claims - Ibovespa rose about 1.88 % to roughly 177,158 points. (disputed by 22 sources) - The US dollar fell to about R$ 5.061, a 0.93 % decline, its lowest level in almost two months. (disputed by 21 sources) - Brent crude oil fell to US$ 86.88 per barrel, a 1.37 % drop. (disputed by 20 sources) - Brazil's Ibovespa index dropped 1.52 % to 173,885 points after the Fed decision. (disputed by 6 sources) - Brent crude oil rose about 7 % to roughly US$88‑90 per barrel. (disputed by 5 sources) - The Ibovespa index reached intraday highs near 168,800 points. (disputed by 2 sources) - The US dollar closed up 0.47% at R$ 5.1252. (disputed by 2 sources) - The U.S. core PCE price index for June advanced 0.1 %, below the 0.2 % market expectation. (corroborated by 23 sources) - WTI crude oil fell to US$ 83.59 per barrel. (corroborated by 19 sources) - Foreign investors increased demand for Brazilian equities, helping lift the market. (corroborated by 18 sources) ## Timeline ### 2026-09-12: B3 to introduce Ibovespa in US dollars amid Brazilian market volatility Brazil's Ibovespa will now be reported in US dollars by B3 to attract foreign investors, amid domestic deflation and market volatility involving the US dollar and oil prices. 10 sources. https://clstr.news/cluster/b3-to-introduce-ibovespa-in-us-dollars-amid-brazilian-market-volatility ### 2026-09-10: Brazil US dollar rises amid STF decision on Master case The US dollar rose in Brazil amid market caution following an STF decision to lift secrecy in the Master case investigation involving Senator Flávio Bolsonaro. 10 sources. https://clstr.news/cluster/brazilian-real-strengthens-to-r-510-amid-electoral-shifts ### 2026-08-29: US Dollar nears R$ 5.20 following hawkish Federal Reserve signals The US dollar approached R$ 5.20 following hawkish Fed signals from Kevin Warsh, while Brazil's Ibovespa extended its winning streak to eight sessions despite global market volatility. 7 sources. https://clstr.news/cluster/us-dollar-rises-toward-r-520-following-hawkish-fed-signals ### 2026-08-21: Brazilian markets rally as Ibovespa rises and dollar weakens Brazil's Ibovespa rose 1.85% to 171,031 points while the dollar fell to R$ 5.14, driven by global risk appetite and US Treasury liquidity shifts. 30 sources. https://clstr.news/cluster/ibovespa-hits-new-intraday-highs-amid-corporate-and-fiscal-developments ### 2026-08-05: Brazilian Real Gains as Dollar Slides After Copom Cut Brazil’s Copom cut the Selic to 14%, sending the dollar to about R$5.10 and lifting the real, aided by oil price gains and election uncertainty. 21 sources. https://clstr.news/cluster/brazilian-real-steadies-as-dollar-falls-to-r512-amid-copom-meeting-and-bolsonaro-ticket-announcement ### 2026-07-30: Brazilian Real Strengthens as US Dollar Hits Two‑Month Low The dollar dropped to R$ 5.06, its lowest in two months, after modest US PCE data and a Fed rate‑hold decision, boosting the real and lifting the Ibovespa about 1.9 % while Brent and WTI prices fell. 120 sources. https://clstr.news/cluster/brazilian-real-gains-as-us-federal-reserve-holds-interest-rates ### 2026-06-29: Brazil's Ibovespa slides amid US‑Iran talks and US payroll data Brazil’s Ibovespa fell 0.2% to 171,689 points on July 1 as US‑Iran talks, US payroll data and election polls weighed on markets, with foreign investors exiting R$ 8.8 bn in June. 23 sources. https://clstr.news/cluster/usda-crop-report-drives-brazilian-soybean-and-currency-markets --- Cite as: Brazil market volatility rises amid rate and political risk. CLSTR, https://clstr.news/situations/brazil-market-reaction-to-us-fed-and-middle-east-tensions