^IBEXIBEX 35

Strong rally for Bovespa and US small-cap companies despite a 58% jump in layoffs

The Bovespa index leads global gains as liquidity shifts toward US small-cap companies despite deteriorating employment and services data. The Russell 2000 Index recorded a 1.13% rise, ignoring released data showing that US layoff plans rose by 58% during August. This move comes amid clear pressure in the labor market, as the ADP employment change recorded a value of 38, which is lower than the expectations of 47. The general caution in the market was reflected by a 1.38% rise in the VIX volatility index, indicating investors are repositioning into small-cap companies despite increasing macroeconomic challenges. The Bovespa index achieved a strong 3.05% rise, leading the performance of global indices mid-session, outperforming the Jakarta Composite which increased by 1.09%. In contrast, European markets saw divergence as the CAC 40 index fell by -0.24% despite service activity in Britain reaching a 4-month high. Pressure continued on Asian markets with the Taiwan Weighted index declining by -0.67%, reflecting a clear shift in risk appetite toward Latin American markets away from technology hubs in Asia.