Nu Holdings (NU) and MercadoLibre (MELI) Shares Slide After Lula Wins in Brazil

What happened

Shares of Nu Holdings (NU), the Brazil-based owner of the digital bank Nubank, plunged 17.0% on Monday, and MercadoLibre (MELI), the online marketplace and payments company, slid 7.8%, after President Luiz Inácio Lula da Silva won Sunday’s presidential runoff.

Lula beat Senator Flávio Bolsonaro 51.8% to 48.2%, according to Brazil’s electoral court, CNBC reported. Investors had bet on the other result. After Bolsonaro finished first in the opening round on 4 October, Brazilian stocks rallied on bets of a shift to the right, and by Friday they stood almost 7% above their level before that vote, Al Jazeera and Nikkei Asia reported.

The whole market fell at once. Brazil’s Bovespa index closed down 13.88%, its worst day since March 2020, and a 10% drop set off a 30-minute trading halt on the B3 exchange, Reuters reported. The real ended about 8% weaker against the dollar, and Bolsonaro refused to concede. Nu closed at $12.59, down 17.0% from the previous close, and MercadoLibre at $1,668.72, down 7.8%.

Why it matters

The worry is Brazil’s budget: investors fear a fourth Lula term means more spending and less pressure to cut deficits. “Investors want a clear and credible commitment to fiscal discipline,” Alejo Czerwonko of UBS Global Wealth Management told Reuters.

For these two companies, the currency matters as much as the politics. Brazil is MercadoLibre’s biggest market, Yahoo Finance noted, and both companies report in dollars, so a weaker real shrinks the dollar value of the same Brazilian sales. Neither company was cited for news of its own on Monday; they were sold along with the country.

What the market is telling us

Nu Holdings’ shares moved 5% or more on 16 of the last 252 sessions, and Monday’s drop was its biggest move in a year. The last move at least this big in the same direction was on 21 February 2025, when the stock fell 18.9%. The stock is down 24.8% this year, and at $12.59 it sits 32.9% below its 52-week closing high of $18.76 from 28 January 2026.

MercadoLibre’s shares moved 5% or more on 14 of the last 252 sessions. The last move at least this big in the same direction was on 8 May 2026, when the stock fell 12.7%. The stock is down 17.1% this year, and at $1,668.72 it sits 29.3% below its 52-week closing high of $2,360.76 from 30 October 2025. $1,000 invested in MercadoLibre five years ago would be worth $1,080 today.

Our view: this was a country trade, not a company one, so what moves these shares next is a credible budget plan from Brasília, or a real that stays weak.