Brazil Stocks Plunge After Lula Wins Presidency

The scale of the move is the story: a 26% single-day drop in the Brazil ETF and a 12% currency swing are not normal election reactions, they signal that prediction markets badly mispriced the outcome and that positioning was heavily skewed toward the other result. The read-through is less about Lula's policies than about how thin the consensus was — when a 20% probability event lands, the unwind is mechanical and violent. Whether the repricing stops at equities or feeds into broader emerging-market risk appetite is the open question, and watch whether the real stabilizes or the move extends.