The election was marked by controversy, including a last-minute Supreme Court decision to extend voting by two hours. Bolsonaro has vowed to challenge the ruling, calling it “unacceptable.” Lula’s campaign had previously reported voter suppression, including suspended public transportation in key areas, prompting the court’s extension. Bolsonaro’s campaign also requested an extension, citing heavy rains that shut polling stations in the south.

Lula’s win is a setback for U.S. President Donald Trump, who had supported Bolsonaro. It also continues a trend of left-of-center leadership in Latin America’s two largest economies—Brazil and Mexico.

Lula will face a Congress dominated by Bolsonaro’s Liberal Party and a country with a public debt of 82.9% of GDP. Analysts expect Lula to continue a “gradual approach” to fiscal policy, preserving public investment and social spending while seeking to stabilize the debt. Markets reacted with volatility, with the iShares MSCI Brazil ETF (EWZ) plunging nearly 20% in overnight trading.

Lula’s campaign focused on his record of reducing poverty and inequality, while warning that Bolsonaro would cut welfare spending and surrender Brazil’s sovereignty. Pollsters attributed Lula’s victory to better-than-expected voter turnout, with Leonardo Barreto of Think Policy noting that voters chose a “known path” over “change.”

Leaders across Latin America, including Peru’s Keiko Fujimori and Uruguay’s Yamandu Orsi, congratulated Lula, calling it a “democratic day” and praising him as a “friend.” Celso Amorim, a former Lula foreign minister, said the leftist leader would be “very important for establishing a point of balance in Latin America.”

Lula’s victory marks his fourth non-consecutive term and is likely to be the last of his political career. In his victory speech, he thanked supporters and pledged to respect all Brazilians, regardless of gender or religion.

Bolsonaro refused to concede and plans to challenge the election results.