U.S. Democrats Trigger Chile's Best Day in Months, Oil Crash Complicates Rate Signal

The Democratic victory in the US midterm elections became on Wednesday the most powerful catalyst for Chilean markets in months, generating a session unlikely to be repeated in the short term and forcing a rereading of the risk map for local assets.

The IPSA closed up 2.5% in pesos and 4.4% in dollars —its best session since June, according to Diario Financiero—, surpassing 10,600 points on a day when Wall Street also celebrated with conviction: the Dow Jones rose 3.1% in its best day since April 2025, while the S&P 500 advanced 1.6% and the Nasdaq 1.4%. The Chilean peso was the best-performing emerging market currency of the day, appreciating nearly $16 against the dollar to close around $966, erasing in one stroke all the gains the greenback had posted during the previous session. The market read was uniform: a Democratic-controlled Congress limits Donald Trump's capacity to push new expansionary fiscal policies, reduces pressure on Treasury yields and, more immediately, opens the door to a de-escalation of the conflict with Iran.

That last point explains the day's most dramatic move: Brent crude plunged more than 8%, breaking below one hundred dollars to trade around US$ 95 per barrel, with WTI falling 7.5% to US$ 88. For Chile, a net crude importer, the drop is good news in terms of the current account and imported inflation. However, the session left a signal running counter to the FX euphoria: local rates rose while US Treasury yields fell, after it emerged that Banco Central board members had considered it "plausible" to evaluate a monetary tightening. The local fixed income market, in other words, is pricing in a more restrictive rate path than the external context would seem to suggest.

That monetary tension lands at a moment when the domestic fiscal discussion enters its home stretch. Finance Minister Jorge Quiroz managed on Wednesday to unblock the regional governments' budget line after increasing by $94.897 billion the resources initially contemplated, in a deal brokered by Senator Yasna Provoste that was approved unanimously in the Joint Committee. In parallel, the Executive restored resources to Servel —raising its budget to $38.748 billion— and guaranteed compliance with the Ricarte Soto Law through a provision obligating Fonasa to budget-supplement whatever is needed to finance high-cost treatments. The Primary Care budget line, by contrast, became bogged down with two consecutive tied votes and must be voted on Thursday. The broader fiscal picture remains cause for caution: the Consejo Fiscal Autónomo warned that, according to its own projections, the probability of public debt exceeding the prudent limit of 45% of GDP exceeds 50% in 2029 and approaches 55% in 2030, even as the structural balance targets in the fiscal policy decree are moving "in the right direction," as the body itself admits.

On the sector front, two deals set the corporate pulse. The most relevant in terms of scale is the memorandum of understanding signed between Agrosuper and Blumar for the former to acquire 100% of Salmones Blumar for up to US$ 540 million —of which US$ 40 million will be held back subject to production milestones—, a transaction that, if completed after due diligence and FNE approval, would consolidate Agrosuper as one of the dominant players in the Chilean salmon industry, reinforcing a segment that already accounted for more than 40% of its revenue. For its part, Arauco, the forestry arm of Empresas Copec controlled by the Angelini group, swung back to profit, accumulating US$ 99 million in earnings through the third quarter of 2026, versus a negative balance of US$ 10.3 million recorded in the same period a year earlier, supported by the recovery in pulp prices although with liabilities that grew by more than US$ 1.1 billion.

Lithium revenues continue to be an unexpectedly robust anchor for public finances: Corfo has received payments of US$ 1,151 million through September 2026, practically quintupling what was collected in the same period last year, in a context of sustained international demand for energy storage systems. The mineral, together with iron, offsets the more moderate performance of copper and consolidates its relevance as the second source of mining-linked fiscal revenue. Meanwhile, the truckers' strike in San Antonio reached its fifth day without resolution, diverting seasonal agricultural exports —including perishable fruit— toward the port of Valparaíso, with additional logistics costs that the export sector absorbs in one of the most sensitive periods of the agricultural calendar.

From a regulatory standpoint, the government is advancing the design of a foreign investment review mechanism on national security grounds —the so-called investment screening—, in a signal of alignment with global trends that bodies such as the OECD and the European Union have accelerated in recent years. The Subsecretaría de Relaciones Económicas Internacionales convened former authorities to gather institutional experience, with the bill projected for Congress in the coming months.

What lies ahead is dense. This Thursday the Education and Primary Care budget lines will be voted on in the joint committee, two of the most politically sensitive of Budget 2027. The local market will continue digesting the implications of the monetary shift that Banco Central hinted at with its signal of possible tightening. And the Agrosuper-Blumar deal will enter the due diligence phase, whose outcome will determine whether the salmon sector experiences its largest consolidation of the past decade. On the external front, the speed at which markets price in a Middle East agreement —and the consequent trajectory of oil— will define whether today's session was an inflection point or a one-off rally in a still-fragile global environment.