Latin America Soars While Big Tech’s Magnificent Seven Stumble
Carnival just wrapped, but Latin American markets are still celebrating. Thanks to tailwinds like rate cuts, policy shifts, and a weaker dollar, global investors are pouring record cash into Brazil, Colombia, and Mexico. The MSCI EM Latin America Index surged over 20% in 2026 — its most powerful start since 1991 amid nine straight weeks of gains.
- BlackRock’s iShares Latin America 40 ETF pulled in $1B+ during January — while the Brazil-focused peer posted decade-high monthly inflows.
- Election hopes power Brazil and Colombia trades, while Mexico faces USMCA review — though the Supreme Court’s tariff strike-down lifted all three markets.
Stateside struggles: While Latam rallies, Big Tech’s “Magnificent Seven” are dragging down US markets. Soaring AI spending and weakening pricing power have sparked concerns about profits, with analysts projecting steep declines in free cash flow ahead. Their outsized index presence keeps the S&P 500 flat while smaller sectors and value names climb. Still, analysts see this as stopping short of a full recession unless a second shock hits, such as a Middle East oil price spike. Until then, the party moves south while Wall Street nurses its hangxiety.
