Ibovespa Rises Amid Commodity Gains and Trade Tensions

In a week marked by economic resilience and global uncertainty, the Ibovespa saw a modest climb. The Brazilian stock index rose by 1.1% on Friday, reaching 127,682 points, and rounding off the week with a 0.3% increase. This rise was predominantly driven by gains in commodity producers.

Commodity Producers Lead the Charge

State-owned oil giant, Petrobras, emerged from consecutive losses with a 2.2% rebound. Iron ore giant Vale also contributed to the positive movement, adding 2% to its value and providing much-needed relief to the index.

Global Trade Tensions Loom Large

While local commodity producers thrived, global markets faced headwinds from escalating trade tensions. China ratcheted up tariffs on U.S. imports to 125% as a countermeasure to Washington’s decision to impose steep duties—up to 145%—on Chinese goods. According to TradingView, these moves are adding to the global market’s volatility and potential recession fears.

U.S. Tariffs Add Pressure

Currently, the U.S. maintains a 10% baseline tariff on most imports, with higher levies on critical materials like steel and aluminum. This approach has intensified concerns over a global economic slowdown as related industries feel the squeeze.

Domestic Economy Shows Resilience

Back on home soil, Brazil showcased signs of economic strength. The country’s key economic activity index rose by 0.4% in February, beating market expectations and showcasing resilience amid an accelerating inflation rate, which hit 5.48% in March—the highest since February 2023.

As the week closed, the Ibovespa’s performance offered a flicker of optimism amidst an intricate web of international trade disputes and evolving economic landscapes.