Lula's victory ensures that Milei remains Trump's favorite ally, but increases investor uncertainty for 2027.

Luiz Inácio Lula da Silva secured a fourth presidential term in Brazil following a second-round victory against Flávio Bolsonaro, garnering 52% of the vote compared to his opponent's 48%. The election saw high civic engagement, with voter abstention falling to its lowest level since 2006 at 19.2%. Following the results, Flávio Bolsonaro announced his intention to challenge the outcome, while Lula characterized his win as a rejection of misinformation and denialism.

The election results have prompted immediate reactions in international financial markets, with the iShares MSCI Brazil ETF experiencing a significant decline of up to 20% in overnight trading. Analysts suggest that while the political landscape reinforces Javier Milei’s position as a primary ally of Donald Trump, the transition has introduced uncertainty for investors regarding the economic outlook leading into 2027. Digital strategy, led by deputy André Janones, is cited as a key factor in the success of the campaign.