Key Highlights

  • iShares MSCI Brazil ETF (NYSEARCA:EWZ) fell 19.82% at the October 26, 2026 close as Brazil's Ibovespa crashed 13.88% to 176,608.23, its worst day in six years, after Lula won the runoff with 51.79%.
  • XP Inc. (NASDAQ:XP) lost 48.36% in the session, almost halving Brazil's largest brokerage ADR, while premarket quotes had shown a fall of about 50.41% before the close in published market data.
  • Nu Holdings (NYSE:NU) fell 16.95% at the close, after dropping 20.42% intraday and as much as 25% in premarket quotes, as the real sank 8.21% to 5.4027 per dollar in published market data.
  • Petrobras (NYSE:PBR) dropped 13.99% and its preferred ADR 15.43%, with TIM down 12.42% and Telefonica Brasil down 12.35%, as investors priced policy risk for state-linked companies in published market data on the dates cited.

iShares MSCI Brazil ETF (NYSEARCA:EWZ): Down 19.82% as the Ibovespa Crashed

Lula won the presidential runoff with 51.79% of the vote in a result described as a surprise, and markets reacted on October 26, 2026. Brazilian markets reacted immediately: the Ibovespa fell 13.88% to 176,608.23, and the B3 exchange triggered its first circuit breaker since March 2020. The real fell 8.21% to 5.4027 per dollar, the biggest daily drop since 1999. Brazil's five-year credit default swap spread rose 26% to 151.67 basis points, which means the cost of insuring Brazilian debt against default increased sharply. Bolsonaro was reported to have refused to concede, which adds political uncertainty. These are the figures that investors in Brazilian assets will compare against in coming sessions. iShares MSCI Brazil ETF (NYSEARCA:EWZ) holds Brazilian stocks priced in reais but trades in US dollars, so a US investor's return combines the local equity move and the currency move. When the Ibovespa fell 13.88% and the real fell 8.21% against the dollar in the same session, the two effects compounded, which helps explain why the fund fell more than the local index. The 19.82% figure is the closing reading. Other quotes of 21% and 26% reflect different timing, so any single figure should be treated as approximate.

XP Inc. (NASDAQ:XP): Down 48.36%, the Sharpest Fall

XP Inc. (NASDAQ:XP) closed down 48.36% on October 26, 2026 after trading about 50.41% lower in the premarket. The move is the largest among the stocks covered in the day's market data. It came as Brazil's runoff result reached markets: the Ibovespa fell 13.88% to 176,608.23, the B3 circuit breaker triggered for the first time since March 2020, and the real fell 8.21% to 5.4027 per dollar. No company announcement was found for the day, so the move is attributed to the election outcome and the reaction in Brazilian assets, not to a statement from the company. Premarket quotes had shown a still larger fall, so the closing price was slightly less severe than the opening indications. A brokerage and wealth platform earns fees and interest from client activity, assets under custody and credit, all of which depend on local markets and rates. When investors fear policy change, those drivers can weaken together. A US-listed ADR adds currency risk, because dollar returns fall when the real falls. Here the real dropped 8.21%, while the Ibovespa fell 13.88%, and the ADR dropped much further, which suggests investors priced in earnings risk beyond the market level.

Nu Holdings (NYSE:NU): Down 16.95% as the Real Sank

Nu Holdings (NYSE:NU) closed down 16.95% on October 26, 2026. Earlier readings were worse: the stock was down 20.42% intraday and as much as 25% in premarket quotes, so the close is the least severe of the three. The fall followed Brazil's runoff, when the Ibovespa dropped 13.88% and the real dropped 8.21%. No company announcement dated October 26 was found, so the fall is attributed to the election shock and to currency translation, not to a new disclosure. Such a spread between readings shows how fast conditions changed. Investors who bought near the open and sold at the close faced very different results. Peers also fell sharply. A digital bank earns interest income on loans and fees on payments, mostly in local currency, but reports and trades in US dollars. When the real falls 8.21%, the dollar value of earnings in Brazil falls with it, even if customer activity is unchanged. Credit quality can also deteriorate if rates rise or if the economy slows, and funding costs can climb when Brazil's five-year credit default swap spread widens, as it did by 26% to 151.67 basis points. For Nu, the largest exposures are consumer credit quality, funding costs and currency translation, and each can move at once.

Petrobras (NYSE:PBR): Down 13.99% on Policy Risk

Petrobras (NYSE:PBR) closed down 13.99% on October 26, 2026, and the preferred ADR PBR.A fell 15.43%. The telecom ADRs TIM and Telefonica Brasil lost 12.42% and 12.35%, and the Brazil ETF EWZ lost 19.82%. European companies with Brazil exposure also fell, with Telefonica in Spain down 7% to 8% and Santander down 3% to 6%. Brent crude settled near USD 115.81 in two readings, while one reading showed USD 110 to USD 112, so oil prices were not the cause. The fall followed Lula's runoff win with 51.79%. The telecom and energy ADRs therefore moved with the broader Brazil sell-off. Selling was not confined to a single industry. Petrobras is controlled by the Brazilian government, which means the president can influence investment plans, fuel pricing and dividend policy through board appointments and public statements. A change of leadership therefore changes the risk investors assign to the company even when oil prices are high. Common shares and preferred shares trade in the United States as separate ADRs, and the preferred ADR fell more at 15.43%, which can reflect different dividend rights and different investor bases. Telecom companies face their own risks, such as regulation and a weaker real, which cuts the dollar value of local revenue.

Where Things Stand

The answer is that Lula's surprise runoff win triggered a Brazil-wide sell-off in equities, the currency and credit, and each US-listed name absorbed it differently. XP Inc. (NASDAQ:XP) fell most at 48.36%. iShares MSCI Brazil ETF (NYSEARCA:EWZ) fell 19.82%. Nu Holdings (NYSE:NU) fell 16.95%. Petrobras (NYSE:PBR) fell 13.99%. No company-specific announcements were found. The real, Brazil's credit spreads and signals from the incoming government are the next catalysts, alongside the Federal Reserve decision on October 28, 2026. Further disclosure from Petrobras (NYSE:PBR) would clarify the picture.