Emerging markets-LatAm stocks retreat on weak commodity prices; Iran sanctions in focus

MSCI's Latin American equities index .MILA00000PUS fell 0.3%, while its regional currency index .MILA00000CUS edged 0.05% higher. The regional equity index underperformed the broader emerging-markets index .MSCIEF this year, as the wider gauge is heavily weighted toward AI-linked stocks in South Korea and Taiwan. Mexican stocks .MXX lost 0.4%, while the peso MXN= was little changed near a two-year high. Mexican President Claudia Sheinbaum said on Monday she expects to reach a trade agreement with the U.S., echoing recent comments by U.S. President Donald Trump. The push for a Mexico-U.S. deal comes as trade tensions flared between Washington and Ottawa after the U.S. on Saturday imposed 50% tariffs on certain Canadian goods after bilateral negotiations collapsed. Those talks are separate from, but politically intertwined with, the broader 2026 review of the U.S.-Mexico-Canada Agreement. "The U.S.-Canada trade spat may benefit Mexico, which comes across as comparatively amenable after taking a more collaborative approach to the mandatory 2026 USMCA joint review," a Tellimer analyst said. Chile's stocks .SPIPSA led regional losses, falling 1.2% after sharp gains in the previous session. The Chilean peso CLP= rose 0.2%. Argentine stocks .MERV fell 0.7%, while the peso ARS=RASL was flat. Data released last week showed economic activity in Latin America's third-largest economy rose 2.7% in June from a year earlier. However, "growth in Argentina's economy remains unbalanced," said Kimberley Sperrfechter, senior emerging-markets economist at Capital Economics. President Javier Milei's government has sharply reduced public spending to curb inflation while seeking to revive growth in the industrial, consumer and construction sectors. "These policies are part of the toolkit for restoring macroeconomic stability, but will result in soft growth...and could sap support for Milei ahead of next year's general election," Sperrfechter said. Latin American stocks edged lower on Tuesday as weaker commodity prices weighed on resource-heavy markets, while investors assessed Washington's expanded sanctions on Iran and their potential implications. Nearly six months into a conflict with Iran that the U.S. has struggled to resolve, Treasury Secretary Scott Bessent announced new measures against Tehran on Monday. Bessent said countries that continue trading with Iran could be cut off from the dollar-based financial system, but declined to provide a timeline or identify potential targets, saying they would be given time to comply. "The two largest external trading partners of Iran over the last five years are China and the UAE," said Hasnain Malik, head of geopolitical risk and emerging-market equity strategy research at Tellimer. "China's dominance of critical-mineral supply, which allowed it to credibly counter Trump's tariff war in 2025, may supersede a secondary-sanctions threat this time round." Lower commodity prices pressured Latin American assets. Oil fell more than 3% to a one-week low as traders viewed the latest U.S. sanctions as posing less risk to supplies than a military escalation. Gold also retreated after hitting a more than three-month high earlier in the session. The region's relative lack of AI-related stocks also left markets out of focus ahead of results from U.S. chip bellwether Nvidia NVDA.O on Wednesday.

Emerging markets-LatAm stocks retreat on weak commodity prices; Iran sanctions in focus

Mexico, Chile and Argentina stocks move unevenly

Argentina growth remains uneven as Milei seeks stability

Latin American stocks edge lower on weaker commodities and Iran sanctions

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