Brazil's Bovespa index plunged about 14% on Monday, one of its biggest one-day falls on record, and the real dropped roughly 10%. Brazilian stocks still closed lower on Tuesday, according to Reuters' Trading Day column.
Spillover was limited. MSCI's emerging-markets index lost about 1% on Monday and largely recovered on Tuesday, while the real rebounded about 1% and Brazil's 10-year yield fell about 50 basis points. US stocks rose on an AI-led rally: the Nasdaq gained about 1.2%, the S&P 500 about 0.6%, and the SOX chip index about 3.6%.
Investors now turn to the Federal Reserve, which announces its policy decision on Wednesday. Rate futures imply about a 90% chance of rates being left on hold.