On May 23, 2025, Brazil's financial markets reacted to the government's announcement and subsequent partial reversal of increases to the IOF (Tax on Financial Operations). The initial measures, announced on May 22, included higher IOF rates on operations such as foreign exchange, international remittances, and investments abroad, aiming to raise R$20.5 billion in 2025 and R$41 billion in 2026 to support the fiscal target of a zero deficit. The package was accompanied by a freeze of R$31.3 billion in government spending for 2025. The IOF hikes, particularly those affecting investments abroad, were interpreted as potential capital controls. The government reversed parts of the increases, maintaining a zero rate for investments in regulated foreign funds and setting the rate for remittances for investment at 1.1%, up from 0.38%. The IOF on international card transactions was set at 3.5%. The Ibovespa index closed up 0.40% at 137,824 points, after reaching an intraday low of 134,997 and having hit a record high of 140,000 earlier in the week. Despite the daily gain, the Ibovespa fell 0.98% for the week. The dollar, which had reached R$5.74 during the day, closed down 0.25% at R$5.6470, with a weekly drop of 0.40%, a monthly drop of 0.55%, and an annual drop of 8.64%. The euro closed at R$6.42. Among Ibovespa stocks, Braskem rose 9.15%, Raízen 7.00%, and Direcional 4.53%, while Azzas fell 6.07%, Magazine Luiza 4.96%, and Vamos 3.06%. Internationally, U.S. President Donald Trump threatened a 50% tariff on European Union imports from June 1 and a 25% tariff on Apple iPhones not manufactured in the U.S. The U.S. House of Representatives approved a tax and spending package that could increase the national debt by trillions, affecting global market sentiment.