Nu Holdings Shares Fall 12 Percent After Lula Wins Brazil Election

Brazilian financial markets faced a sharp selloff after Luiz Inacio Lula da Silva defeated right-wing Senator Flavio Bolsonaro in the presidential election, sending shares of Nu Holdings Ltd. (NU) down more than 12 percent in overnight trading late Sunday. Investors had anticipated a Bolsonaro victory, and the unexpected result raised concerns about Brazil's economic outlook, fiscal policy, interest rates, and currency.

The decline extended beyond the digital financial services company. The iShares MSCI Brazil fund (EWZ) fell more than 18 percent at the time of the report, while Petroleo Brasileiro (PBR), Brazil's largest oil company, lost about 11 percent, according to the source report.

Official election results from Brazil's Superior Electoral Court showed Lula winning 51.8 percent of the vote, compared with 48.2 percent for Bolsonaro. The outcome overturned market expectations that a Bolsonaro administration would adopt a more investor-friendly approach to economic policy.

Brazil has faced persistent fiscal deficits, rising public debt, and inflation in recent years. The election result intensified uncertainty over how the incoming administration's policies could affect borrowing costs, the Brazilian real, and investor confidence.

Guilherme Abbud, CEO of Persevera Asset Management, told Bloomberg that Brazilian markets could experience a significant reaction when trading opened Monday. He also projected that the Brazilian real could weaken by at least 7 percent.

Abbud described the potential market reaction as comparable to the response following the first round of voting on Oct. 4, when the results also surprised investors.

"It would probably be a mirror image of what happened after the first round, which was also a huge surprise. It could be somewhat worse because moves to the downside tend to involve more panic and emotionally driven stop-losses," Abbud said.

Retail investors also reacted to the selloff. Data from Stocktwits showed that sentiment surrounding NU shares was bearish, while message volume increased 300 percent over 24 hours at the time of the report.

Despite the negative sentiment, some retail investors viewed the decline as a potential buying opportunity. One Stocktwits user wrote, "$NU this gap down open is the buy back opportunity been waiting for."

Sentiment surrounding PBR moved from bearish to bullish over the same 24-hour period, even as the stock declined following the election results. Rising oil prices remained a point of discussion among investors monitoring the company's performance.

One Stocktwits user wrote, "Mass panic as the stock falls. Oil is still $110. It costs PBR $5 to extract oil."

Performance figures in the report showed that NU shares had declined nearly 12 percent in 2026, while PBR had gained more than 119 percent over the same period, supported by rising oil prices.