• 

  45%−0.4%

  Managed Diplomatic Standoff

  Washington continues to avoid formal recognition while stopping short of punitive measures against Brasília. Lula’s camp consolidates institutions at home, and the dispute remains a diplomatic irritant rather than a market-moving crisis.

  Non-Energy Materials −0.4% · Finance −0.3% · Energy −0.2%

• 

  25%−1.4%

  U.S. Hardens Stance

  Trump turns the recognition delay into a broader confrontation over Flávio Bolsonaro’s treatment and alleged election irregularities. Brasília responds defensively, raising the odds of targeted sanctions, visa restrictions, or trade threats.

  Non-Energy Materials −1.4% · Finance −0.9% · Industrials −0.8%

• 

  15%−0.3%

  Legal Fight Dominates

  The dispute shifts from presidential recognition to courts and extradition procedure. That path reduces the chance of immediate U.S.-Brazil economic retaliation but keeps political uncertainty alive.

  Non-Energy Materials −0.2% · Finance −0.2% · Energy +0.1%

• 

  15%+0.7%

  Rapid Recognition Pivot

  Institutional pressure from the State Department, Congress, courts, and U.S. allies pushes Trump to recognize Lula’s election while still criticizing the process. This outcome would remove the largest immediate diplomatic tail risk.

  Non-Energy Materials +0.6% · Finance +0.6% · Energy +0.4%

Each figure is the modeled move of the S&P 500 if it happens. For information only. Not investment advice.