Brazil-related stocks and ETFs tumbled in premarket trading after Lula won Brazil’s runoff about 52% to 48%, reversing a first-round deficit. Goldman Sachs says an extreme scenario could see USD/BRL up 10%, long yields up about 200bp and Brazilian stocks down 15%.

XP Inc. fell 38%; iShares MSCI Brazil Small-Cap ETF fell 28%; Inter & Co and Bank Bradesco SA fell 27%; Pagseguro Digital and iShares MSCI Brazil ETF fell 26%; Itau Unibanco Holding SA fell 25%; StoneCo fell 24%; Nu Holdings fell 21%; Franklin FTSE Brazil ETF fell 20%; Petroleo Brasileiro SA Petrobras fell 19%; Sabesp and Telefonica Brasil SA fell 15%; Energy Company of Minas Gerais and Ambev SA fell 13%; MercadoLibre fell 9% Gerdau SA fell 8%; Vale SA fell 7%; Embraer S.A. fell 3%.

President Luiz Inácio Lula da Silva came from behind to win Brazil’s runoff election, halting a right-wing wave sweeping Latin America and defying predictions that the 80-year-old political veteran had finally reached the end of his extraordinary career.

The electoral court declared Lula the victor with 51.8% versus 48.2% for Flávio Bolsonaro, after a messy Sunday election rife with allegations of voter suppression and a last-minute extension of voting hours. It was a stunning outcome, one that will upend markets, eked out in the 11th-hour and that saw voters from Lula’s heartland in Brazil’s poorest region rally to the rescue of the leftist leader who has been the face of the region’s resistance to Trumpism.

But markets will wake up on Monday morning to the twin shock of Lula’s improbable win and Bolsonaro’s calls for the vote to be annulled. Signs point to a major rout and an intense selloff of assets. Investors had been banking on a Bolsonaro win to fix the fiscal accounts. Now they are bracing for extended political uncertainty.

Lula’s reelection for an unprecedented fourth term extends a political career spanning more than four decades and delivers a humiliating blow to the movement built by former President Jair Bolsonaro, whose eldest son sought to carry the family name and MAGA-tinged brand of populism back to the presidential palace.