Brazil's Q4 earnings season was the worst on record, with only 37% of Brazilian companies beating net income estimates for Q4 2025, the lowest in XP's history. This is attributed to the peak impact of the Selic rate at 15%, the highest since 2006, which has compressed domestic economic activity. Despite this, forward earnings estimates remain stable and markets are expecting Copom's first rate cut as the start of an easing cycle. The damage was uneven across sectors, with 67% of oil and gas companies reporting results below expectations, while 40% of mining companies reported positive surprises compared to 40% negative ones. Despite these disappointments, stock-price reactions have been seen as an unusual pattern.