Why Brazilian stocks jumped after the 2026 first round: Flávio Bolsonaro edges Lula and heads to a runoff
Flávio Bolsonaro took 47.04% to Lula's 45.15% after polls had Lula ahead. EWZ traded 12.33% higher before the US open and Brazilian ADRs rose 6% to 10.5%.
- Flávio Bolsonaro won 47.04% of valid votes and Lula 45.15% with 99.95% counted; the runoff is on October 25.
- EWZ traded at $42.90 at 08:18 UTC, 12.33% above Friday's close, by MoveSurge's premarket bars.
- Every major final poll had Lula ahead; in 2022 a similar poll miss lifted the Ibovespa 5.54% the next day.
Brazilian assets jumped on Monday, October 5, 2026 after Senator Flávio Bolsonaro took 47.04% of the first-round presidential vote against 45.15% for President Luiz Inácio Lula da Silva, a result every major final poll had the other way around. The iShares MSCI Brazil ETF (EWZ) traded at $42.90 at 08:18 UTC (4:18 a.m. ET), 12.33% above Friday's close of $38.19, according to MoveSurge's one-minute premarket bars, and Brazilian company shares listed in New York were up 6% to 10.5% before the bell.
Neither candidate reached 50% of valid votes, so the two meet in a runoff on Sunday, October 25. Flávio Bolsonaro, the eldest son of former president Jair Bolsonaro, is running because his father is barred from office until 2030 and was convicted in September 2025 of plotting a coup.
How Brazilian assets moved before the US open
Real futures on the CME rose 3.78% on Sunday night as the count came in, and EWZ was already up 9% in after-hours trading by 10 p.m. Brasília time. On Monday morning Nu Holdings rose 10.5% in premarket trading, Petrobras about 10%, Itaú Unibanco 9% or more, Vale 8%, Ambev 7% and Embraer 6%, and Santander gained about 2% in Madrid.
Brazil's own markets had not opened when these prices printed. The Ibovespa closed Friday at 192,115, up 2.63%, and the dollar at 5.2133 reais, so part of the pre-vote positioning was already in place. Fund managers surveyed by Bloomberg Línea expected the Ibovespa to open 6% to 7% higher and the dollar to fall 3% to 4% against the real, and Ivo Chermont of Quantitas told Reuters he expected stocks to rise 4% to 6% with the dollar down 2% to 4%.
Why a two-point lead moved markets this much
The margin is narrow and settles nothing before October 25, but it resets the starting point for the runoff, because Datafolha's final poll on October 3 had Lula ahead 45% to 42%, Quaest had him ahead 46% to 45% and AtlasIntel 46.7% to 43.8%. A candidate investors associate with spending cuts, a public-debt ceiling and privatizations finished first instead, and right-wing parties also gained ground in the governor, Senate and Chamber races, which matters for any fiscal reform whoever wins on October 25. Pedro Galdi of AGF summed up the trade to Reuters: the market wants change and reform.
The 2022 first round is the closest precedent
| 2022 first round | 2026 first round | |
|---|---|---|
| Right-wing candidate | Jair Bolsonaro, 43.20% | Flávio Bolsonaro, 47.04% |
| Lula | 48.43% | 45.15% |
| First-place finisher | Lula | Flávio Bolsonaro |
| Next-day market reaction | Ibovespa +5.54% to 116,134; dollar -4.09% against the real; Petrobras +7.99% | EWZ +12.33% premarket; Brazilian ADRs +6% to +10.5% |
In 2022 Jair Bolsonaro also beat his polls in the first round while finishing second, and the next day the Ibovespa had its best session since April 2020; Lula went on to win the runoff four weeks later. This time the Bolsonaro candidate finished first. EWZ is priced in dollars, so its premarket gain combines the expected rise in Brazilian shares with the expected strengthening of the real. Abstention reached 21.07%, the highest first-round rate on record, and nearly 8% of valid votes went to candidates outside the top two, led by Augusto Cury with 2.89%.
Why were Brazilian stocks up on Oct 5, 2026?
Flávio Bolsonaro won 47.04% of the first-round vote on October 4, 2026 against 45.15% for President Lula, after every major final poll had Lula ahead. Investors read the result as better odds of spending cuts, and EWZ traded 12.33% above Friday's close before the US open.
Who won the first round of Brazil's 2026 presidential election?
Flávio Bolsonaro finished first with 47.04% of valid votes and Lula second with 45.15%, with 99.95% of ballots counted. Neither reached 50%, so the two meet in a runoff on October 25.
When is Brazil's presidential runoff?
The runoff between Flávio Bolsonaro and Lula is on Sunday, October 25, 2026.
How did Brazilian markets react after the 2022 first round?
On October 3, 2022, the day after Jair Bolsonaro outperformed the polls, the Ibovespa rose 5.54% to 116,134, its best day since April 2020, and the dollar fell 4.09% against the real. Lula went on to win that runoff.
Sources
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Ao vivo: Brasil vai às urnas para eleger presidente, governadores e Congresso
— Bloomberg Línea
TSE count with 99.95% tallied: Flávio Bolsonaro 47.04%, Lula 45.15%; abstention 21.07%, highest first-round rate on record; runoff required
-
Brazil election first-round results: Lula vs Flávio
— The Rio Times
Flávio Bolsonaro 47.04%, Lula 45.15%; Augusto Cury 2.89%
-
Lula and Flávio Bolsonaro face off in Brazil run-off
— NPR
No candidate passed 50%; Lula and Flávio Bolsonaro meet in a runoff on October 25
-
Bolsonaro and Lula head to runoff: 5 takeaways from Brazil's election
— The Washington Post
Flávio Bolsonaro about 47% and Lula about 45% with more than 99% counted; runoff on October 25
-
Últimas pesquisas do primeiro turno para presidente
— Revista Fórum
Final polls: Datafolha Lula 45% Flávio 42%; Quaest 46% to 45%; AtlasIntel 46.7% to 43.8%
-
US shares of Brazilian companies rally after first-round election result
— Investing.com
Premarket: Nu +10.5%, Petrobras about +10%, Itaú and Bradesco +9% or more, Vale +8%, Ambev +7%, Embraer +6%; Santander about +2% in Madrid
-
Brazil markets expected to jump after Bolsonaro outperforms polls, analysts say
— Reuters via Investing.com
Polls had expected Lula to finish first; Chermont expects stocks +4% to +6% and the dollar -2% to -4%; Galdi: the market wants change and reform
-
Liderança de Flávio no primeiro turno abre espaço para rali do mercado, dizem gestores
— Bloomberg Línea
Managers expect the Ibovespa +6% to +7% and the dollar -3% to -4%; right-wing gains in governor, Senate and Chamber races; EWZ up more than 12% premarket
-
Mercados de Brasil festejan la victoria de Flávio Bolsonaro en primera vuelta
— Ámbito
CME real futures +3.78% Sunday night; EWZ about +9% after hours
-
Brazil election market data: real, Ibovespa, ADRs
— The Rio Times
Ibovespa closed Friday October 2 at 192,115, up 2.63%; dollar at 5.2133 reais
-
Brazil's 2026 election: what to know and what's at stake
— Council on Foreign Relations
Flávio Bolsonaro's platform of spending cuts, a public-debt ceiling and privatizations; Jair Bolsonaro barred until 2030 and convicted in September 2025; Lula defeated Jair Bolsonaro in the 2022 runoff
-
TSE conclui apuração do 1º turno: Lula 48,43% e Bolsonaro 43,20%
— Metrópoles
2022 first round: Lula 48.43%, Jair Bolsonaro 43.20%
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Bolsa sobe 5,54%, maior alta desde abril de 2020, com os números das eleições; dólar cai 4,09%
— Mais Retorno
October 3, 2022: Ibovespa +5.54% to 116,134, best day since April 2020; dollar -4.09%; Petrobras +7.99%
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