26.08.202620:55:46UTC+00Ibovespa Ends Flat as Yields Edge Higher

The Ibovespa ended Wednesday’s session virtually unchanged at 174,586 points, as earlier gains were erased following the release of US PCE data. The Federal Reserve’s preferred inflation gauge surprised to the upside, reinforcing expectations of a more restrictive monetary stance by the Fed and driving global bond yields higher. Vale slipped 0.3% despite a rise in iron ore prices.

On the domestic front, Brazil’s inflation rate slowed to 4.25% in the first half of August from 4.44% in July, remaining below the central bank’s upper tolerance band of 4.5% and strengthening bets on a cut to the Selic rate. Financial stocks offered some support to the index, with Bradesco advancing 1.2% and Itaúsa gaining 0.4%.

Petrobras added 0.2% even as oil prices retreated amid renewed talks between Iran and Oman; prices, however, remain elevated and a potential US-Iran peace agreement is still seen as uncertain. Sabesp climbed 1.5% after Itaú BBA reiterated its buy recommendation in the wake of the stock’s pullback following its quarterly earnings release. Embraer rose 0.9%, supported by news of aircraft purchases by LATAM and the prospect of winning a bidding process with the Indian government.