US Stock Market Move | Bolsonaro's election performance beats poll expectations, Brazilian concept stocks rally collectively.

On Monday, Brazilian concept stocks strengthened collectively after the U.S. stock market opened. As of press time, financial platform XP Inc (XP.US) rose over 30%, digital bank Nu Holdings (NU.US) rose over 13%, Petroleo Brasileiro SA Sponsored ADR Pfd (PBR.US) rose over 10%, Vale S.A. Sponsored ADR (VALE.US) rose over 4%, and MercadoLibre (MELI.US) rose over 6%. On the news front, the first-round results of Brazil's presidential election were released, with Flvio Bolsonaro leading incumbent President Lula with about 47% of the vote versus Lula's about 45%, performing better than previous poll expectations. The two will face off in a second round on October 25. Investors are focused on his policy proposals to tighten fiscal policy, control public spending, and reduce corporate tax burdens. In the first-round presidential election results, since no candidate received more than half of the votes, incumbent President and Workers' Party candidate Lula and former President Bolsonaro's son and Liberal Party candidate Flvio Bolsonaro, who will compete in the second round, each delivered speeches. Lula spoke that night in So Paulo, a city in southern Brazil, saying his campaign team would seek voter support with a governance plan that values economic development and social inclusion, and called on voters who abstained in the first round to actively participate in the second round. "We have reached the second round, and it is time to face the test," Lula said. "Starting tomorrow, a new contest will begin between the two campaign teams." Flvio expressed satisfaction with the voting results at a press conference held in Braslia, Brazil's capital. He said, "Brazil yearns for change." If successfully elected, he will begin addressing the "real problems" facing Brazil. Andrs Abadia, chief Latin America economist at Pantheon Macroeconomics, said Bolsonaro's better-than-expected performance, along with a shift to the right in the congressional political landscape, is expected to support Brazilian stocks and put downward pressure on long-term bond yields.