Ibovespa ends week below 178k points as Iran conflict tensions persist

The Brazilian stock market closed Friday in retreat, unable to hold onto the modest gains it had scraped together in the morning. The Ibovespa fell 0.91 percent to 177,653 points, a decline that capped a week of losses as investors retreated into caution ahead of the weekend. The broader mood reflected a market caught between competing forces: relief at some signs of stability in the Middle East, and deeper anxiety about what a prolonged conflict between the United States, Israel, and Iran might mean for oil prices, inflation, and interest rates worldwide.

The index had touched 180,995 points at its high and dipped to 177,321 at its low, a range that captured the day's internal struggle. Trading volume reached 29.48 billion reais. Over the full week, the Ibovespa had accumulated a loss of 0.95 percent. Oil prices told a similar story of uncertainty. The Brent contract rose 2.67 percent to close at $103.14 per barrel, but only after an initial dip. News that ships were moving through the Strait of Hormuz and that the United States had eased some sanctions on Russian oil had briefly lifted sentiment, yet the gains proved fragile as traders remained fixated on how long the conflict might last.

The war that began roughly two weeks ago has become the dominant variable in global markets. Strategists at Citi noted that the conflict remains in a phase where uncertainty and implied volatility are extraordinarily high. On Wall Street, the S&P 500 fell 0.61 percent, and the dollar strengthened against other currencies, including the Brazilian real. The spillover into Brazilian equities was real but less severe than it might have been, according to Bruno Perri, chief economist and founding partner at Forum Investimentos. Yet he pointed to additional pressures building domestically: February's inflation reading, released the day before, and Petrobras's announcement of fuel price increases were both tightening the screws on the Central Bank's decision scheduled for the following week.

The monetary policy question has become more complicated. The futures market had been pricing in a quarter-point cut to the Selic rate, but now traders were assigning a minority probability to the Central Bank holding rates steady at 15 percent. Back in late January, the bank had signaled that a cutting cycle would begin in March. The conflict and inflation data have clouded that outlook. Perri observed that the geopolitical shock is affecting not just expectations for next week's decision but also the market's view of how long and how deep the rate cuts might go—a shift that ripples through discount rates and ultimately pressures stock valuations.

Individual stocks reflected the day's competing currents. Petrobras preferred shares fell 0.73 percent despite oil's gains, as investors weighed the company's announced fuel price increase against government measures aimed at shielding consumers from the war's impact. The banking sector, which had attempted a recovery earlier in the session, gave up those gains: Itaú Unibanco preferred shares dropped 0.68 percent, Bradesco fell 2.06 percent, Banco do Brasil declined 1.73 percent, and Santander Brasil closed down 1.18 percent. Vale, the mining giant, lost 1.19 percent as iron ore futures in Asia turned negative. Magazine Luiza, the retailer, had surged nearly 10 percent at its high despite reporting a 10.5 percent decline in adjusted net profit for the fourth quarter, but it too surrendered those gains by the close, ending down 0.64 percent. The company's executives said they were focused on expanding and reopening stores starting in 2026.

Hypera, the pharmaceutical company, managed a small gain of 0.37 percent after reporting about 450 million reais in profit from continuing operations in the fourth quarter and a 48 percent jump in net revenue. The company's president suggested on a conference call that sales would accelerate in coming months as patents on certain medications, including semaglutida, expired. Steel stocks were hammered: CSN fell 6.27 percent under the weight of investor concerns about the company's debt levels, while Usiminas dropped 0.93 percent and Gerdau fell 1.66 percent. Outside the main index, Randoncorp collapsed 9.76 percent after reporting a 231 million real loss in the fourth quarter, though the company projected consolidated net revenue between 12.5 billion and 14 billion reais for 2026 and said it remained committed to reducing debt.