MercadoLibre shares fall 10.8% premarket as Lula wins fourth presidential term
Key Facts
MercadoLibre shares fell 10.8% in premarket trading on October 26, according to Investing.com, after Brazilian President Luiz Inácio Lula da Silva won the runoff. The move followed a broader decline in Brazilian assets during Asian hours after the election result was announced. Brazil is the company’s largest market, where it generated more than half of its revenue and financial income in the second quarter of 2026. Available data, however, do not establish that the election result directly caused the stock’s decline. The stock’s last recorded close before that, on October 23, was $1,810.15.
Lula defeated his runoff rival Flávio Bolsonaro, securing a fourth presidential term in an electoral first, Reuters reported via UOL. Lula had placed second in the first round before winning the presidency in the runoff. The result highlighted a political paradox for investors: Lula’s return to the presidency is matched by a parliamentary composition that could limit his ability to advance his agenda. Reuters expects Bolsonaro’s party and its allies to control more than 280 seats in the lower house and up to 50 seats in the Senate. This balance is likely to keep the path of fiscal policy under scrutiny during the new term.
Brazilian assets declined in Asian trading after the result was announced. November Brazilian real futures fell 10%, while the Tokyo-listed Nomura NF Ibovespa Link ETF dropped 15%, Reuters reported via UOL. The moves followed gains ahead of the runoff: Brazilian stocks closed Friday about 7% above their level before the first round, and the real was about 5% stronger against the dollar. Reuters described those gains as poised to reverse after Lula’s victory. A strategist at Warren Investimentos said: "We expect a sharp market reaction on Monday, with a strong repricing and a wave of asset selling."
A UBS investment official linked investors’ stance to the need for fiscal policy clarity, saying they want "a clear and credible commitment to fiscal discipline." The official added that the market gains after the first round had "largely already been priced in" before a clear fiscal plan emerged. Brazil is particularly important to MercadoLibre watchers because of the scale of its business there: the company recorded $5.530 billion in revenue and financial income in the Brazilian market in the second quarter, out of a total of $10.169 billion. Its revenue and financial income in Brazil rose 59% year over year in the quarter. Across the company, revenue and financial income increased 50% to $10.169 billion, while net income was $466 million.
MercadoLibre expects to report third-quarter results on November 4, according to the tentative date listed by investor relations. The results will be the next near-term milestone for tracking the company’s performance after the election, including its business figures in Brazil. At the economic level, the International Monetary Fund forecast Brazilian GDP growth of 2.4% in 2026, before slowing in 2027. The fund said strengthening the fiscal position could help lower inflation and pave the way for lower interest rates. The Focus report published by Brazil’s central bank every Monday summarizes market analysts’ consensus forecasts through the preceding Friday; these forecasts come from analysts, not the central bank itself.