Latin American stock markets react to surprises, not ideology

Brazil’s stock market lost around 17 percent, and nearly a quarter in dollar terms, following the unexpected reelection of incumbent President Luiz Inácio Lula da Silva. It was the sharpest stock market reaction to a South American election result since libertarian economist Javier Milei’s victory in Argentina, according to Morningstar data. The common denominator? How much investors had banked on a different outcome, regardless of the winner’s politics.