Stronger-than-expected June job creation reinforced bets on a more hawkish BCB, while the Fed held rates steady and bank shares led declines.
Brazil's Ibovespa fell more than 1% to trade below 175,500 on Wednesday as investors weighed stronger-than-expected domestic labor data against a Federal Reserve decision that kept global rates concerns in focus. Brazil created a net 145,161 formal jobs in June, above market expectations of 115,000, reinforcing views of a resilient labor market and supporting expectations for a more hawkish BCB. The Fed left interest rates unchanged as expected, but three FOMC members favored a rate hike, adding to worries that borrowing costs could stay higher for longer. Financials led the decline, with Itaú and Bradesco down 2%, Itaúsa off 1.5%, B3 down 3%, and Santander tumbling 7% after missing ROE expectations. Axia lost more than 1% and Sabesp fell nearly 4%, while Ambev erased earlier gains to trade 1% lower after its earnings-driven rally. Vivo and TIM also extended recent losses. Petrobras bucked the broader weakness, rising 2% as oil prices advanced.