TLDR
- Nu Holdings fell 13% and MercadoLibre dropped 7% in Sunday overnight trading after Lula won Brazil’s election.
- The iShares MSCI Brazil ETF fell nearly 19%, and November real futures dropped 10% in Asian trading.
- Lula won reelection with about 51.8% of the vote, beating Flavio Bolsonaro.
- Analysts rate Nu Holdings Moderate Buy and MercadoLibre Strong Buy, with price targets above Friday’s close.
- MercadoLibre reports third-quarter results in early November.
Shares of Nu Holdings and MercadoLibre fell sharply in Sunday overnight trading. Nu Holdings dropped 13%, and MercadoLibre fell 7%.
The iShares MSCI Brazil ETF lost nearly 19%. The drop points to wide selling of Brazilian assets.
The moves followed Brazil’s presidential runoff. President Luiz Inacio Lula da Silva won reelection with about 51.8% of the vote.
BREAKING: Brazil’s stock market falls -20% after President Lula da Silva is unexpectedly re-elected. pic.twitter.com/R3HTIhFSPG
— The Kobeissi Letter (@KobeissiLetter) October 26, 2026
He defeated right-wing challenger Flavio Bolsonaro. Many investors had hoped for a Bolsonaro win.
Those investors expected tighter government spending and lower corporate taxes. They also expected stronger fiscal discipline.
The Brazilian real also came under pressure. November real futures fell 10% in Asian trading.
A Tokyo-listed Brazilian stock ETF, the Nomura NF Ibovespa Link ETF, plunged 15%. The iShares fund had gained about 13% earlier this month.
Nu Holdings Faces a Sharp Drop
Nu Holdings reported a strong second quarter. It served 139 million customers and earned more than $1 billion in quarterly net income for the first time.
Its credit portfolio grew 37% year over year to $39.4 billion. Loans overdue by more than 90 days rose to 6.9%.
The company launched U.S. operations in September. It also dismissed talk of buying British digital bank Monzo.
Analysts give Nu Holdings a Moderate Buy rating. The average price target is $18.61, about 23% above Friday’s close.
MercadoLibre Prepares for Earnings
MercadoLibre will report third-quarter results in early November. Analysts expect revenue of about $10.69 billion and earnings of $9.34 per share.
The company has spent heavily on free shipping, logistics and credit cards. Those costs have weighed on earnings, even as revenue grew strongly.
MercadoLibre holds a Strong Buy rating, with 9 Buy and 3 Hold recommendations. The average price target is $2,291.82, about 27% above Friday’s close.
Lula’s team aims for a budget surplus of about 1.3% of GDP by 2030, while public debt exceeds 82% of GDP. Luis Felipe Vital of Warren Investimentos expects a sharp market reaction on Monday.
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