Ibovespa Jumps 2% and Dollar Hits One-Year Low Post-IPCA: How Are Markets Performing on Tuesday (August 13, 2025)?

• Why Is the Ibovespa Rallying?
• How Low Can the Dollar Go?
• Wall Street’s Record Run
• Asia and Europe: A Mixed Bag
• FAQs: Your Market Questions Answered

The Ibovespa surged 2% on Tuesday (August 13, 2025), nearing its all-time high of 140,000 points, while the dollar dipped to its lowest level in a year against the real. The rally was fueled by lower-than-expected inflation data (IPCA), strong corporate earnings, and Optimism around potential interest rate cuts by the Fed. Wall Street also hit record highs, with the S&P 500 climbing 0.85%. Meanwhile, Asian and European markets closed mixed amid lingering trade tensions. Here’s a deep dive into the day’s market movements.

Why Is the Ibovespa Rallying?

The Ibovespa (IBOV) soared over 2,600 points in early trading, reaching 138,414.25 by 1 PM (Brasília time), up 2.06%. The catalyst? A softer-than-expected July IPCA reading of 0.26% (vs. 0.35% forecast), which bolstered hopes for lower interest rates. Analysts Adriano Valladão and Matheus Chaves from Santander noted, "The IPCA beat expectations, with surprises in food-at-home and industrial goods prices. Qualitatively, the negative surprise in industrial Core prices offset the positive surprise in services."

Blue chips like Petrobras (PETR3/PETR4) and Vale (VALE3) ROSE over 1%, while Sabesp (SBSP3) and BTG Pactual (BPAC11) skyrocketed 10% post-earnings. Even the U.S.-Brazil tariff spat took a backseat to the bullish momentum.

How Low Can the Dollar Go?

The dollar slumped to a one-year low against the real, trading at R$5.3942 (-0.88%). Globally, the DXY index (measuring the dollar against six major currencies) fell 0.46% to 98.060 as weak U.S. inflation data reinforced Fed rate-cut bets. "The CPI miss is a green light for the Fed to ease in September," remarked the BTCC team, citing TradingView data.

Wall Street’s Record Run

U.S. indices rallied on expectations of a Fed pivot. The S&P 500 hit 6,427.43 (+0.85%), the Dow Jones jumped 1.06% to 44,442.32, and the Nasdaq gained 0.97% to 21,593.62. FedWatch tools now price a 91% chance of a 25-bps cut in September, up from 85% pre-CPI.

Asia and Europe: A Mixed Bag

Asia cheered the U.S.-China tariff truce extension, with Japan’s Nikkei hitting a record 42,718.17 (+2.15%). Europe’s Stoxx 600 edged up 0.24% to 548.07, cautiously eyeing U.S. data.

FAQs: Your Market Questions Answered

What drove the Ibovespa’s surge?

The IPCA miss, strong earnings (e.g., Sabesp, BTG), and blue-chip momentum fueled the rally.

Why is the dollar weakening?

Dovish Fed expectations post-CPI and global risk appetite pressured the dollar.

Will the Fed cut rates in September?

Markets now see a 91% probability of a 25-bps cut, per CME Group’s FedWatch.