Trump's Iran Truce Lifts Chilean Stocks, But Growth Forecasts Fall

Donald Trump's diplomacy with Iran unleashed a wave of optimism across global markets that propelled the IPSA to its best session in weeks, though that external boost cannot disguise the structural strains still holding back Chilean growth: a World Bank trimming its forecasts, an industrial sector pausing investments, and a fiscal debate that has yet to find resolution.

The trigger was the U.S. president's announcement that he had called off planned strikes on Iran and that a deal was close to being signed. "The naval blockade will remain in full force and effect until this transaction is finalized," Trump declared on his Truth Social network, as reported by Diario Financiero. Markets responded immediately: the S&P 500 was up 1.27%, the Nasdaq advanced 2.4%, and the Dow Jones added 1.6%, according to La Tercera. In Santiago, the IPSA jumped 2.6% to push past 10,700 points, while the dollar retreated ten pesos on the day. Brent crude fell 3.2% to $90 a barrel, easing inflationary pressures, although Iranian sources denied any consensus had been reached — a reminder that geopolitics remains a double-edged variable.

The market euphoria, however, sits alongside a more sober reading of the macroeconomic outlook. The World Bank cut its growth projection for Chile to 2.1% in 2026, down from the 2.4% previously estimated, a signal that reinforces industry concerns. Sofofa, which took part this week in the Finance Committee debating the so-called miscellaneous bill, has warned that "investing in Chile has become too expensive and too complex," and published a study quantifying the cost of the tax burden: a four-percentage-point cut to the First Category Tax — currently at 27%, the largest increase among OECD countries over the past twenty years — could generate at least 210,000 jobs between 2026 and 2030. In that same parliamentary session, economist Manuel Marfán called for the creation of an expert commission, while Rodrigo Corbo pointed to "recalibrating" the fiscal costs, underscoring that the government has yet to close the debate on the direction of tax policy.

Investment in large-scale projects offers a positive note in that landscape. According to the Corporación de Bienes de Capital, executed investment in the first quarter grew 19% year-on-year, driven by mining and energy — two sectors whose symbiosis is becoming increasingly strategic. Joaquín Villarino, executive president of the Consejo Minero, stressed that Chile has the capacity to surpass six million tons of copper a year, but conditioned that goal on four factors: legal certainty, faster permitting, cost competitiveness, and energy and water infrastructure. The reform to the Environmental Impact Assessment System (SEIA) that the government has submitted to Congress — restoring at least ten annual sessions to the Committee of Ministers in place of a single-person authority — is aimed precisely at unclogging that regulatory bottleneck.

On the trade front, exports continue to post a remarkable performance. In the first five months of the year they reached $49.565 billion, the highest level on record through May, with a 12.1% year-on-year increase, according to the Undersecretariat of International Economic Relations. The most striking figure is India: shipments to that market more than doubled, growing 118% to $2.335 billion, driven by copper, gold, iodine, lithium, and apples. The government is seeking to accelerate a trade agreement with New Delhi, whose potential as the world's third-largest economy by 2030 makes it a long-term bet. In parallel, Chile and Peru reactivated their bilateral business council, with an agenda focused on investment, energy, and trade, signaling that regional economic diplomacy is also regaining momentum under the Kast administration.

In local capital markets, the session showed signs of investor appetite. Auto financier BK placed peso-denominated bonds worth 60 billion pesos — the largest corporate issuance since April 2021 — with demand equivalent to 1.6 times the offering, and announced an additional capital increase of 20 billion. Banking is also rebounding: in May, Scotiabank lifted its earnings by nearly 40% year-on-year to 221.063 billion pesos, while Santander led the sector in absolute terms, according to Diario Financiero. On the inflation front, financial traders are anticipating that June's CPI will register its first decline of the year, with a median of -0.2%, reinforcing expectations that the Banco Central will hold its monetary policy rate at 4.5% at next Wednesday's meeting.

Not every corner of the corporate fabric shows the same strength. Sartor Administradora General de Fondos filed for judicial reorganization, invoking the need to "regain financial stability," while BCI Corredores de Bolsa accused it of concealing a forced liquidation process. In the real economy, Cervecería Austral paused a $100 million investment for its new plant in Punta Arenas amid falling alcohol consumption and rising construction costs. And apple producers in the Maule region, who have lost 20,000 hectares of planted area over two decades, are now facing NOAA's confirmation that El Niño is already in place and could intensify through the Northern Hemisphere winter of 2026-2027, adding climate pressure to a sector urgently seeking mitigation strategies.

The week ahead will focus attention on the Banco Central's monetary policy meeting, where the market is pricing in a pause in the rate cycle, and on the evolution of negotiations between Washington and Tehran, whose confirmation or failure will determine whether the boost from cheaper oil and rising markets has real substance or was merely a diplomatic mirage. On the domestic front, debate over the miscellaneous bill and the progress of the SEIA reform will test the Kast government's ability to translate its pro-investment rhetoric into concrete legislation before the political cycle grows more complicated.