Shares of Nu Holdings (NU), the parent company of Brazilian digital bank Nubank, plunged roughly 20% on Oct. 26, Monday, after President Luiz Inácio Lula da Silva won a surprise fourth term in Brazil’s presidential election.
Lula defeated right-wing Senator Flávio Bolsonaro with 51.8% of the vote, compared with Bolsonaro’s 48.2%, according to Brazil’s Superior Electoral Court.
Markets had been expecting a Bolsonaro victory after he performed better than expected in the first round of voting on Oct. 4.
The result sparked a broad selloff in Brazilian stocks. State-controlled oil producer Petrobras (PBR) dropped 17%, while Latin American e-commerce giant MercadoLibre (MELI) fell more than 10%.
The iShares MSCI Brazil ETF (EWZ), which tracks Brazilian equities, sank 21% as of writing.
Who is Lula and what did he do
Lula first became Brazil’s president in 2003. Before that, he was a union leader.
During his first two terms from 2003 to 2010, Brazil’s economy grew amid a global commodities boom. His administration expanded social welfare programs, including Bolsa Família, which helped lift millions of Brazilians out of poverty.
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His political career later suffered a setback when he was convicted of corruption in 2017 and spent more than a year in prison. Brazil’s Supreme Court annulled his convictions in 2021, allowing him to return to politics.
Lula previously vowed his third term would be his last when he returned to office in 2023. But his party backed another presidential run this year, even as he turns 81 on Tuesday.
Since his return, Lula has expanded social spending, raised some taxes and pushed for greater government involvement in major companies, including state-controlled Petrobras.
Warren Buffett was a former investor in Nubank. Cheng Xin / Getty Images
What is Nubank and why Brazil’s election matters for it
Nubank is one of Latin America’s largest digital banking platforms, offering credit cards, personal loans, savings accounts and other financial services.
Founded in Brazil in 2013, the company has expanded into Mexico and Colombia. Its business is particularly sensitive to changes in interest rates, consumer spending and borrowing costs.
Brazil has struggled with persistent fiscal deficits, rising public debt and inflation, and Lula’s victory has raised concerns about Brazil’s fiscal outlook, potential tax increases and greater government intervention in the economy.
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Guilherme Abbud, CEO of Persevera Asset Management, said that the Brazilian real could weaken by at least 7% following the election.
“It could be somewhat worse because moves to the downside tend to involve more panic and emotionally driven stop-losses,” Abbud said, according to Bloomberg.
The selloff comes as Nubank shares have already fallen nearly 12% in 2026.
Legendary billionaire Warren Buffett was a former investor in Nubank. His Berkshire Hathaway first invested in the Brazilian digital bank in 2021 and fully exited its position in the first quarter of 2025, according to Whalewisdom data based on 13F filings.
Some Wall Street analysts remain optimistic about the digital bank’s longer-term prospects.
Monness Crespi recently initiated coverage of Nubank with a Buy rating and a $20 price target, The Fly reported on Oct. 26. The firm cited growing adoption of digital banking and opportunities to increase customer spending and lending.
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