Luiz Inácio Lula da Silva just won his reelection in Brazil, and the financial markets immediately hit the panic button. Financial analyst Rafael pointed out that the EWZ, the main exchange-traded fund for Brazilian stocks in the US, crashed by about 18 per cent in after-hours trading.
While this doesn’t mean the local Brazilian stock market will drop by the same amount, it shows a sudden repricing of risk. At the same time, currency contracts traded overseas pushed the dollar up to 5.50 Brazilian Reais. A weaker Real means everyday items like imported electronics, fuel, and travel will cost more, naturally pushing local inflation higher.
🚨LULA FOI REELEITO. E O MERCADO JÁ REAGIU.
📉 Bolsa: o EWZ, principal ETF de ações brasileiras nos EUA, chegou a cair cerca de 18% no after-market. Isso não significa que o Ibovespa cairá 18% na abertura, mas mostra uma forte reprecificação de risco.
💵 Dólar: com o mercado brasileiro fechado, contratos negociados no exterior chegaram a indicar dólar na região de R$ 5,50. Dólar mais alto pressiona importados, eletrônicos, combustíveis e viagens. Inflação tende a subir.
— Rafael Zattar (@ZattarRafael) October 26, 2026
Online reactions were divided. Rickson dismissed the sell-off as a possible temporary overreaction, pointing to Ibovespa’s gains during Lula’s third term.
@ZattarRafael Deixa o mercado reagir pq ele é especulativo. Depois ele devolve. Com o Lula III a Ibovespa DOBROU. E você sabe disso, Zattar
— Rickson ✠ (@ricksongarciap) October 26, 2026
User iugislavion took a different angle, arguing that the dollar rose 36% during Bolsonaro’s four-year presidency, while under Lula so far, it has fallen by 1.23%. The user added that markets may have to wait at least four years for another candidate who advocates selling national assets at what they consider undervalued prices.
@ZattarRafael Deve ser difícil para o mercado ter que ficar pelo menos 4 anos esperando aparecer outro sabujo para falar em vender nossos ativos nacionais a preço de banana. 4 anos de Bolsonaro o dólar valorizou 36%, já no Lula até agora deslavorizou -1,23%. Nem Freud explica.
— Iugislavion (@iugislavion) October 26, 2026
Meanwhile, marciojp14 mocked the US speculative markets’ reaction, suggesting that trading sentiment around Lula’s reelection was pressuring Brazil’s currency.
@ZattarRafael quem diria q um mercado especulativo americano iria depreciar o br se o lula ganhasse hein kkkkkkk
— marcio jp (@marciojp14) October 26, 2026
READ ALSO: Brazilian Olympic Committee Partners With Cardano to Bring Blockchain and AI to Sports
Election panic cycle could push Brazilians into stablecoins and crypto
This market reaction to a presidential win is a predictable cycle across South America, and it constantly drives normal citizens toward decentralized money.
Due to political uncertainty, foreign funds may sell off local assets because they fear sudden changes to tax laws, corporate regulations, or government spending.
However, this initial panic almost always outpaces reality. Historically, once the government resumes office and sets clear rules, the foreign money eventually returns, and the national stock market recovers.
While foreign stock traders panic over the election results, Brazil is currently ranked as the number one country in the world for crypto adoption.
According to the Central Bank of Brazil, digital asset purchases in the country jumped to over $12.1 billion in the months leading up to this election year. When the Real dropped to 5.50 against the US dollar, Brazilians moved to the country’s instant payment network, Pix, to buy Tether (USDT) and USD Coin (USDC). In a single month, Brazilians bought over $2.6 billion in these stablecoins.
Meanwhile, Brazilian Finance Minister Dario Durigan announced that the government will offer specialized business loans to help companies manage the financial strain of two massive economic overhauls.
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