Why iShares MSCI Brazil ETF (EWZ) fell 31.26%
iShares MSCI Brazil ETF (EWZ) fell 31.26% on October 26, 2026 — Lula's win sends Brazil real and EWZ tumbling.
What happened
Brazil's real plunged more than 8% in spot trading after Lula won the presidential election, and the Bovespa futures extended losses to nearly 20%.
Why it moved
A Lula win raises the market's expectation of looser fiscal policy and higher state influence, which lifts Brazil's risk premium.
Why it matters
Brazil sits at the center of the EM Rotation trade, where capital moves between emerging markets on policy credibility and currency direction.
What would break the thesis
The move unwinds fast if markets see policy continuity or if Lula's early fiscal signals stay moderate, since a sharp recovery in the real would pull EWZ back.