SAO PAULO, March 7, 2026, 03:48 (UTC-03:00).
Brazil’s benchmark Ibovespa stock index on Sao Paulo’s B3 exchange ended Friday down 0.61% at 179,364.82 points, leaving it 4.99% lower on the week. A jump in oil prices as the U.S.-Israeli war against Iran spread, plus a weak U.S. payrolls report — the monthly U.S. jobs report — kept investors on the defensive even as Petrobras and other oil names rose. 1
The drop came at a bad time for local equities. Traders had entered March expecting Brazil’s rate-setting committee, Copom, to start cutting the Selic benchmark this month, and Citi analysts wrote softer inflation “would allow Copom to begin the cutting cycle in March.” Higher crude now clouds that path, and central bank director Nilton David said oil’s inflationary effect was clear — “the question is: for how long?” 2
That leaves B3 caught between a slower domestic economy and a fresh external shock. Official data showed Brazil grew 2.3% in 2025, its weakest pace since the pandemic year of 2020, after quarter-on-quarter growth of just 0.1% in the final three months of the year. 3
Monday briefly looked different. The Ibovespa rose 0.28% to 189,307.02 as Petrobras preferred shares jumped 4.58%, voting shares climbed 4.63%, and peers PRIO and PetroReconcavo also gained with crude, showing how quickly investors were rotating toward oil producers. 4
Tuesday erased that move. The index fell 3.28% to 183,104.87 as fears over the Strait of Hormuz, a chokepoint for oil exports, and a wider conflict hit risk appetite, while GDP data that matched expectations failed to steady trade. Bruno Perri, chief economist at Forum Investimentos, said the growth figures confirmed activity was losing pace, but the external backdrop eclipsed the local signal. 5
Wednesday brought a 1.24% rebound to 185,366.44 after signs Washington would move to protect oil tankers and after Brazil’s central bank offered banks relief tied to mandatory support for the deposit guarantee fund. The bounce did not last: by Thursday the Ibovespa had dropped 2.64% to 180,463.84, and José Victor Cassiolato of Victrix Capital said a longer conflict meant a stronger dollar, dearer oil and slimmer odds of a big rate cut. 6
Friday was more mixed. Petrobras posted fourth-quarter net profit of 15.6 billion reais and said it would distribute 8.1 billion reais to shareholders through interest on equity, a Brazil-specific payout similar to a dividend. CFO Fernando Melgarejo said the company would “love” to pay extra dividends if higher oil prices lift cash flow for long enough, but later added there was no room for that “at this time.” 7
What could change the script is either a quick de-escalation in the Middle East or a clearer path for Brazilian rate cuts. But Goldman Sachs said Brent could climb above $100 a barrel if flows through Hormuz do not recover, while Brazil’s central bank has already signaled that any easing cycle will be data-dependent and that policy will stay restrictive after it starts. 8
