Brazil's Flávio Bolsonaro faces corruption investigation weeks before elections

SAO PAULO (AP) — Brazilian presidential candidate Sen. Flávio Bolsonaro is under investigation for corruption, money laundering and tax evasion for receiving millions of dollars from a disgraced banker to finance a movie about his father, former President Jair Bolsonaro.

Brazil’s top court unsealed several documents late Thursday that show Sen. Bolsonaro, President Luiz Inácio Lula da Silva's primary opponent, is under investigation for receiving 61 million reais ($12 million) from a banker at the center of a corruption scandal to produce an unreleased movie titled “The Dark Horse."

The investigation, which centers on whether the Bolsonaro family misused the funds and whether the payments were properly reported to Brazilian authorities, threatens to undermine Sen. Bolsonaro’s bid for the presidency. The first round of elections is slated for Oct. 4, and the senator is locked in a tight race with Lula.

The banker, Daniel Vorcaro, who was arrested in March, is accused of defrauding many of Banco Master’s 800,000 clients, including several state government pension funds, out of hundreds of millions of dollars by convincing them to make questionable investments. The scandal has engulfed several high-ranking officials in Brazil.

The allegations first became public in May. Sen. Bolsonaro has denied any wrongdoing and said Friday during a campaign event in the Amazonian city of Manaus that he was seeking private investment for the movie.

“It is very positive that the documents are unsealed," Flávio Bolsonaro told journalists at the event. "I want transparency in everything. I will only confirm what I always said. There's nothing wrong about the movie.”

One document alleges that Eduardo Bolsonaro, who lives in Texas and is one of Flavio Bolsonaro’s brothers, “guided how the resources (sent by Vorcaro) could be managed in the United States.”

Prosecutors suspect the funds for the film were used to pay Eduardo Bolsonaro's expenses and to promote Flavio Bolsonaro's political agenda to the Trump administration, documents show.

Eduardo Bolsonaro denied any wrongdoing in his social media channels and said investigators “are trying to repeat the mechanism that worked against Jair Bolsonaro.” The former president was sentenced by Brazil's Supreme Court to 27 years in prison after a coup attempt.

On Thursday, Brazil's federal police seized documents from the film's production company and from lawmaker Mário Frias, who sent about 2 million reais ($400,000) to a non-profit linked to the film. The production company and Frias deny any wrongdoing.

Supreme Court Justice André Mendonca, a Bolsonaro appointee, opened the investigation into Sen. Bolsonaro in July at the request of Brazil's federal police.

Mendonca's office has been silent about the case for many weeks, which led Lula's allies to accuse the Supreme Court justice of shielding Sen. Bolsonaro from investigations.

Mendonca unsealed the documents at the request of Chief Justice Luiz Edson Fachin, who sought to ease a political crisis within the court and bring transparency into the sprawling Banco Master probe. Fachin on Friday ordered Mendonca to release all documents regarding the Banco Master case within 24 hours.

Paulo Henrique Paschoeto Cassimiro, a political science professor at Rio de Janeiro State University, said Sen. Bolsonaro's links with Vorcaro could hurt his chances against Lula three weeks before the vote, after he spent months recovering in the polls since the revelations surfaced in May.

Cassimiro added that the unsealed documents could also boost Lula's standing since he has insisted for all of them to be aired publicly, no matter who they hit, as he knows "much of the scandal has hit politicians on the right, although not exclusively.”

Lula has brought the case to his campaign in ads and recent interviews.

“Banco Master was created in the Bolsonaro administration. Vorcaro was arrested in mine, the bank was shuttered in mine,” Lula said in an interview with broadcaster SBT aired Thursday evening.

Brazil’s Central Bank shut down Banco Master, whose assets topped $16 billion, in November.

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AP journalist Eléonore Hughes contributed to this report from Rio de Janeiro.

Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america

Opposition presidential candidate Sen. Flavio Bolsonaro sits on a motorcycle during a visit to a Honda motorcycle factory in the Manaus Free Trade Zone during a campaign event in Manaus, Amazonas state, Brazil, Friday, Sept. 11, 2026. (AP Photo/Edmar Barros)

Opposition presidential candidate Sen. Flavio Bolsonaro wears protective glasses and headphones during a visit to a Honda motorcycle factory in the Manaus Free Trade Zone during a campaign event in Manaus, Amazonas state, Brazil, Friday, Sept. 11, 2026. (AP Photo/Edmar Barros)

Opposition presidential candidate Sen. Flavio Bolsonaro gives a thumbs-up during a visit to a Honda motorcycle factory in the Manaus Free Trade Zone during a campaign event in Manaus, Amazonas state, Brazil, Friday, Sept. 11, 2026. (AP Photo/Edmar Barros)

NEW YORK (AP) — U.S. stocks rebounded Friday and regained much of their losses for the week after oil prices eased off their recent spurt. An update on inflation across the United States that came in close to economists’ expectations, even if prices are still rising too quickly for everyone’s liking, also helped calm the market.

The S&P 500 climbed 0.9% and snapped a four-day losing streak, its longest since June. The Dow Jones Industrial Average jumped 509 points, or 1%, and the Nasdaq composite rose 1%.

They got help from a pullback in oil prices, which had jumped to their highest levels since May because of the ongoing war with Iran. The price for a barrel of Brent crude, the international standard, fell 2.8% to settle at $104.61 after getting near $110 overnight.

That took a bit of pressure off inflation, which remains stubbornly high. A report on Friday showed that U.S. consumers had to pay prices for gasoline, food and other costs of living that were 3.4% higher last month than a year earlier.

While still high, that was close to what economists expected and what Wall Street was prepared for. The data also strengthened expectations among traders that the Federal Reserve will feel compelled to hike its main interest rate at its meeting next week.

Such moves are the typical way the Fed tries to rein in high inflation, and they work by filtering through the bond market, making it more expensive for everyone to borrow money, slowing the economy and hopefully removing fuel for further inflation.

The rising expectations for an upcoming hike to rates drove up the yield of the two-year Treasury, which moves with guesses for upcoming Fed action, to 4.62% from 4.56% late Thursday.

Longer-term Treasury yields held steadier, though. That could be a signal that investors in the bond market see upcoming hikes by the Fed as helping to keep control of inflation over the longer term. The yield on the 10-year Treasury rose more modestly to 4.97% from 4.95% late Thursday, while the 30-year yield eased to 5.36% from 5.37%.

Economists say hikes could quiet questions about the Fed’s commitment to keeping inflation under control. Worries had risen earlier in the summer about its credibility and whether it would do what’s needed to bring inflation down, even if it causes pain for the economy in the near term.

Federal Reserve Chairman Kevin Warsh has been adamant about not giving hints about where the Fed may take interest rates, though he did calm some concerns among investors at a speech late last month. President Donald Trump, meanwhile, has been pushing for interest rates to go lower rather than higher.

“Symbolism can trump substance, even when it comes to monetary policy,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.

It’s all coming at a moment when confidence among Americans continues to sour. A preliminary report from the University of Michigan on Friday said U.S. consumer sentiment is falling, with declines for both Democrats and Republicans.

Their expectations for inflation coming in the year ahead jumped to 4.6% from 4% last month. That’s the highest reading since June, and it’s concerning for the Fed and for economists because it can trigger a vicious cycle of behavior that worsens inflation.

On Wall Street, Kroger rose 2.7% after the grocer reported a stronger profit for the latest quarter than analysts expected. It also held firm on its forecast for profit over the fiscal year, even though it trimmed its forecast for an important underlying measure of revenue growth.

ACV Auctions, whose digital marketplace connects wholesale buyers and sellers of vehicles, soared 44.2% after Copart said it would pay $10.50 in cash for each of the company’s shares. Copart, whose online vehicle auctions sold more than 4 million units in the last year, fell 2.6%.

An early jump for Oracle faded as trading progressed after the tech giant reported stronger profit and revenue for the latest quarter than analysts expected. After initially leaping 8.5%, its stock swiveled between gains and losses and finished with a loss of 1.7%.

Stocks closely tied to the artificial-intelligence industry broadly became shaky this summer on worries that the AI frenzy may have sent prices too high.

All told, the S&P 500 rose 65.28 points to 7,656.98. The Dow Jones Industrial Average added 509.19 to 52,573.29, and the Nasdaq composite climbed 251.31 to 26,333.04.

In stock markets abroad, indexes rose in Europe as oil prices eased. London’s FTSE 100 added 0.4% after a report said the U.K. economy was stronger in July than economists expected.

Stock markets were weaker in Asia, where Japan’s Nikkei 225 lost 1.9% and South Korea’s Kospi fell 1.8%.

AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.

The per-gallon price is displayed on an electronic sign outside a QT gasoline station Monday, Sept. 7, 2026, in Greenwood Village, Colo. (AP Photo/David Zalubowski)

Currency traders watch monitors at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Thursday, Sept. 10, 2026. (AP Photo/Ahn Young-joon)