Brazil's IPCA-15 consumer price index fell 0.4% in August 2026, reversing a 0.06% increase in the previous period and exceeding economists' median forecast for a 0.3% decline. It was the index's first monthly drop since August 2025 and its steepest decline since August 2022. Annual inflation eased to 4.24% in the 12 months through mid-August, from 4.52% previously, according to the detailed inflation release; a market report cited a reading of 4.25%, down from 4.44% in July. Both figures place inflation below the central bank's 4.5% upper tolerance band and within its target range of 3%, plus or minus 1.5 percentage points. The Ibovespa rose nearly 1% toward 176,000 as lower inflation strengthened expectations for a Selic cut and pushed bond yields lower. Financial stocks advanced, led by Banco do Brasil, Bradesco, Itaú and Itaúsa, while Sabesp gained after Itaú BBA reiterated its buy rating. Vale rose on higher iron ore prices, while Petrobras declined as oil prices fell after reports that Iran and Oman discussed a temporary joint maritime corridor in the Strait of Hormuz. The central bank cut its benchmark rate by 25 basis points to 14% this month, its fourth consecutive reduction, and its next policy meeting is scheduled for September 15-16.