Brazilian stock market suffers worst fall in over four years after Bolsonaro candidacy announcement

The São Paulo stock exchange's main index, the Ibovespa, plunged 4.7% on Friday, 5 December 2025, marking its steepest single-day decline since August 2021. The sharp drop followed the announcement by Senator Flávio Bolsonaro that he will seek the presidential nomination for his father's former party, the Liberal Party (PL).

The senator stated he received a "mission" from his father, former President Jair Bolsonaro, to run. Party president Valdemar Costa Neto publicly endorsed the choice, solidifying Flávio Bolsonaro's position as the PL's pre-candidate for the 2026 election.

Market Reaction and Political Context

Financial analysts attributed the market's dramatic sell-off directly to the political news, citing fears of renewed instability and policy uncertainty. "The market is pricing in a scenario of heightened political risk," said one chief economist from a major investment bank, who spoke on condition of anonymity. The drop erased billions in market value and significantly underperformed other global indices.

The announcement comes amid ongoing tensions within the governing coalition. In a separate political development, Senator Davi Alcolumbre publicly thanked President Luiz Inácio Lula da Silva for securing federal investment in infrastructure for the state of Amapá, signalling a potential easing of recent friction between the two.

Legislative and Judicial Developments

In other news from Brasília, the Senate approved a bill allowing certain auditors at the Federal Audit Court (TCU) to receive remuneration above the constitutional salary cap for other public servants. The proposal now proceeds to the Chamber of Deputies.

Meanwhile, at the Supreme Federal Court (STF), the rapporteur for an impeachment request altered the voting procedure, a change seen as favourable to Justice Gilmar Mendes, who is involved in the case. The specific details of the procedural shift were not immediately disclosed in the broadcast report.

World Cup Draw and International Note

In international affairs, former US President Donald Trump was awarded a 'peace prize' created by FIFA at his own request. The award ceremony coincided with the final draw for the upcoming FIFA World Cup, held in the United States.

The Brazilian national football team learned its group stage fate, being drawn to play its matches on the US East Coast. Sports analysts began immediate assessments of Brazil's opponents for the tournament.

A video from the draw event showed celebrations concluding with a performance of the song 'YMCA' and a dance by Donald Trump.

Security and Accountability

In Rio de Janeiro, the Public Prosecutor's Office (MP-RJ) has formally charged two officers from the Special Police Operations Battalion (Bope) with homicide. The charges relate to the death of a young man during a traditional 'festas juninas' street party in the city. The case is now proceeding through the judicial system.