Another day of strong emotions for the market, which intensified from 2:15 pm (Brasilia time, or 1:15 pm in New York), with the bags firing and the currencies around the world presenting opposite movements to what they registered in the morning.
The reason for this? United States President Donald Trump’s decision to put into force for 90 days only a minimum tariff of 10% for countries that did not retaliate the United States except China, which had a high rate from 104% to 125%.
This made room for an immediate recovery of Ibovespa ( +3%) and New York bags (NASDAQ, +12%), under two interpretations. The first, that flexibility removes the chances of a recession in the largest economy in the world. The second, that the US government would be willing to sit down to negotiate with China – and it gained even more strength after Trump himself states that “an agreement will be made with China and all countries.”
Opportunity in international fixed income: Access the monthly selection of XP to invest in Strong Currency
Ibovespa closed up 3.12%at 127,795.93 points, and the portfolio gain was almost widespread – from 87 papers, 85 climbed, except car (AMOB3) and CPFL (CPFE3), which closed stable.
After a morning of uncertainty for the main B3 index that was hesitant between Trump’s highs and casualties, communications gave a firm north to the global bags: high. First came the flexibility in Trump’s tariff policy for countries that did not retaliate the US for 90 days, which reinforced the possibility that the world’s largest economy may not face an economic recession – a theme of attention to the financial market, according to the analyst of active investments Ilan Arbetman. “US tariff policy will be decisive about whether the US will face a recession or not in the second half,” he says.
It was “an important Trump retreat with the implementation of reciprocal tariffs, and markets reacted positively,” summarizes economist Rodrigo Ashikawa of the main Asset Management.
As a result, New York scholarships interrupted a four -day fall sequence and had a strong appreciation. The S&P 500 fired 9.52%, the third largest increase from World War II to the main stock market index, according to FactSet.
Dow Jones Industrial Averag advanced 2,962.86 points, or 7.87%, registering its biggest advance since March 2020.
Check out the graph below the turn of the American and Brazilian markets (on a normalized base):
Exchange
The reaction can also be observed in the exchange market. After flirting with $ 6.10 in the morning, the dollar retreated and closed at $ 5.84 with Trump’s truce.
At the end of the session, the cash dollar was negotiated at R $ 5,8473, falling 2.52%. The currency interrupted a sequence of three high trading sessions, which accumulated 6.57%appreciation. Despite the slip on Wednesday, the dollar still has gains of 2.49% in April.
The intensification of the trade war has avoided the fears of American and global recession, pushing the prices of commodities down, with the barrel of oil operating below the $ 60 line. It also played against Latin American currencies the prospect of weakening Yuan, measured by China to alleviate the effect of Trump’s tariff.
“Emerging coins, especially those in Latin America, greatly reflect the dynamics of commodities, which were freely falling in the morning,” says the chief economist of the new future investments, Nicolas Borsoi. “It is worth noting that investors see Brazil with a substitute for assets of China. The day China suffers and Yuan depreciates, the real also falls.”
The tide turned after the US president made the announcement about the break in the tariffs. On the other hand, Trump’s message made the dollar gain ground from pairs such as the euro and Japanese Iene, but losing strength compared to the emerging and commodity-exporting countries, especially the Mexican and Colombian weights, as well as the South African Rand.
The dollar dx index, which measures the currency compared to a peer basket, appreciated 0.11%to 102.88, recovering from earlier losses.
Check out the reaction of the dollar in front of the real and front market coins developed in the session:
Oil
In the commodity market, the reaction was immediate in the oil market. Commodity prices closed over 4% on Wednesday, recovering from the minimums of four years registered at the beginning of the session.
Brent LCOC1 future contracts closed up with $ 2.66, or 4.23%, to US $ 65.48 per barrel. The CLC1 CLC1 West Texas Intermediate (WTI) Oil Future Contracts closed up $ 2.77, or 4.65%, to US $ 62.35. Both contracts lost about 7% at the beginning of the session before reversal.
“We have reached a point of inflection in the commercial conflict, with Trump giving countries that have shown a desire to work in a deal to get rid of tariffs some time to solve it,” said Phil Flynn, a senior analyst at Price Futures Group.
Uncertainty is still a watchword for markets amid such volatility with Trump’s ads. However, the day ended with more relief for investors.
(with Reuters and Estadão Content)