Ibovespa renews records and closes above 144 points.

(Reuters)- The Ibovespa reached new all-time highs on Tuesday, closing above 144 points for the first time, while financial agents continue to bet on a drop in interest rates in the United States this week, but the rise was modest and trading volume was below the year's average.

The Ibovespa, the benchmark index of the Brazilian stock market, rose 0,36% to 144.061,74 points, renewing its record closing high. At its peak during the day, it reached 144.584,10 points, a new all-time intraday high. At its lowest point, it registered 143.546,58 points.

The financial volume totaled R$21,01 billion, above the daily average for the month, which was only R$18,6 billion, but still below the 2025 average of R$23,6 billion.

The Federal Reserve begins its meeting this Tuesday to decide on interest rates for the world's largest economy, with the outcome expected on Wednesday at 15 p.m. (Brasilia time). The decision will be accompanied by economic projections and followed by a press conference with Fed Chair Jerome Powell (15:30 p.m.).

In the market, bets point to a 0,25 percentage point cut in the current range of 4,25% to 4,50% per year.

"The possibility of reductions in US interest rates is something that brings optimism," said Willian Queiroz, partner and advisor at Blue3 Investimentos, citing that it opens up space for "carry trade" movements, with investors taking money out of that economy and investing in emerging markets.

Investors in the Brazilian market are also paying close attention to the statement that will accompany the Central Bank's monetary policy decision on Wednesday, when the Selic rate is expected to remain at 15%. According to Citi strategists, the interest rate easing cycle is the next catalyst for the stock market.

The outcome of the Central Bank's Monetary Policy Committee (Copom) meeting will be known after the market closes.

According to Thiago Pedroso, head of equity trading at Criteria, the recent surge in the Brazilian market has multiple contributing factors, including the reaction to the highs recorded in US stock markets, the fall in the yield curve, and the improvement in the perception of global risk.

But he highlighted that there is a very specific element in the local market, which is the low level of allocation to Brazilian stocks, both by foreign investors and domestic institutional investors.

"The break above the Ibovespa highs was not accompanied by an increase in flow... Those already positioned tend to hold their positions, betting on a possible 'bull market'. Meanwhile, those who are out feel the pressure to enter, risking missing a potentially explosive movement," he observed.

This movement would be a potential rally following the outcome of the 2026 elections in Brazil, which, in Pedroso's view, is the most relevant factor for the direction of the local market, "with the potential to significantly change expectations."

HIGHLIGHTS

- MARFRIG ON advanced 5,6% and BRF ON closed up 5,28%, marking the sixth consecutive day of gains for both stocks, with attention focused on potential synergies from the merger of BRF with Marfrig. On the 8th, when Marfrig announced the estimated date for the completion of the transaction, both companies announced dividends.

- LOJAS RENNER ON rose 4,19%, closely followed by C&A MODAS ON, which appreciated 3,6%, in a positive session for consumer stocks amid renewed easing of Brazilian interest rate curves, as well as data showing the labor market remains resilient. The B3 consumer index advanced 1,07%.

- NATURA ON shares fell 2,13%, after rising more than 2% the previous day, when it announced an agreement to sell Avon's operations in Guatemala, Nicaragua, Panama, Honduras, El Salvador and the Dominican Republic, grouped under the name Avon Card. Investors remain awaiting the outcome for Avon International.

- Banco do Brasil ON advanced 0,55%, recovering part of the previous day's losses (2,2%), while Itaú Unibanco PN fell 0,26%, Bradesco PN retreated 0,23%, and Santander Brasil Unit closed with an increase of 0,24%.

- VALE ON shares rose 0,35%, driven by higher iron ore prices in China, where the most actively traded contract on the Dalian Commodity Exchange climbed 0,82% to 803,5 yuan ($112,94) per ton. S&P also upgraded Vale's rating to "BBB" from "BBB-", with a stable outlook.

- PETROBRAS PN advanced 0,25%, amid rising oil prices abroad, where the price of a barrel under the Brent contract increased by 1,5%. The state-owned company announced on Tuesday that it has hired Engeman to restart production at fertilizer plants in the Northeast.

- SABESP ON fell 0,44%, after the water and sanitation company showed that it accelerated the achievement of its service universalization goals in August. According to Citi, the data reinforces confidence that Sabesp is on track to meet, and possibly exceed, its 2025 targets.

- COGNA ON rose 0,98% after announcing its intention to make a bid to acquire up to all of the shares of its subsidiary Vasta. The plan aims to delist Vasta from Nasdaq, and the intended price of the offer will be US$5 per share. In NY, VASTA advanced 2,06%.

- PRIO ON closed up 1,32%, also having on its radar the news from the previous day, confirmed late Monday by the company, that it had obtained an installation license from the federal environmental agency Ibama for the interconnection of the wells in its Wahoo field, where it plans to start production next year.

- PAGBANK, which is traded in New York, jumped 10,67%. The company said it will hold a conference call on Thursday to provide an update on its strategic initiatives.