JournalBiz.news — Markets Steady as Brazil’s Institutions Reaffirm Rule of Law in Bolsonaro Case

Financial markets in Brazil held steady on Friday after the Supreme Court unanimously rejected Jair Bolsonaro’s appeal against his 27-year prison sentence for plotting a coup following his 2022 election defeat.

The decision, delivered by four justices of the Supreme Federal Court, signaled a clear message to investors: Brazil’s democratic framework remains intact despite political turbulence. The Bovespa index ended the day virtually unchanged, while the real traded slightly stronger against the dollar as analysts said the ruling reduced institutional uncertainty.

“This verdict removes a lingering question mark over judicial independence,” said Paulo Vasconcellos, chief economist at Banco Safra. “Markets interpret stability as predictability—and that’s what the court provided today.”

Bolsonaro, already confined to his home for violating earlier court orders, will not be transferred to prison until his final appeals conclude. Prosecutors accuse him of directing a campaign to overturn the 2022 vote, pressuring military officials, and enabling a network that spread disinformation about election fraud.

The verdict consolidates Justice Alexandre de Moraes’s ongoing campaign against antidemocratic movements, which includes prosecutions of social-media executives and ex-cabinet members.

International observers say the outcome strengthens Brazil’s reputation among investors who feared institutional backsliding. “Rule of law is one of Brazil’s most valuable economic assets,” said an analyst at the Economist Intelligence Unit. “The STF has reaffirmed that political power has limits.”

Still, uncertainty lingers. Bolsonaro’s far-right base continues to stage demonstrations, and his party retains influence in Congress. Some economists warn that prolonged unrest could slow reforms needed to boost growth above 2 percent.

The geopolitical dimension also complicates trade relations. Trump, Bolsonaro’s ideological ally, denounced the case as a “witch hunt” and claimed to have imposed tariffs on Brazilian goods. No official confirmation followed, and the U.S. Trade Representative has not issued new tariff schedules.

For Brazil’s business community, however, the greater takeaway lies in governance, not geopolitics. “This was a stress test for democracy and markets passed it,” said Fernanda Torres, a São Paulo-based policy adviser. “Institutions worked. Investors can exhale.”

The STF’s decision may not heal Brazil’s political rifts, but it has stabilized the legal ground beneath them—something markets, more than anyone, understand.