Argentina Markets Plunge After Milei Loses Buenos Aires Vote

Argentina's President Javier Milei suffered a significant defeat in the Buenos Aires provincial election, where the opposition Peronist Fuerza Patria coalition won nearly 47% of the vote compared to Milei's Libertad Avanza's 34%, a margin wider than polls had predicted. This setback has intensified market turmoil, with the peso plunging nearly 6% against the dollar, the stock index falling 13%, and Argentine bonds experiencing their steepest declines since the 2020 debt restructuring. Milei's approval ratings have dropped below 40%, compounded by corruption allegations involving his sister and legislative struggles. Analysts warn that the election result signals a tough road ahead for Milei's government, potentially deepening financial instability and recession risks as the administration faces the national midterms in October. In response, Milei has vowed to maintain his fiscal policies despite voter discontent prioritizing job security over inflation control. The market's reaction reflects concerns over Milei's capacity to implement his economic reforms amid political challenges and growing investor pessimism.