What happened

Shares of XP (XP -2.27%) were surging higher on Monday on what was a good day for the markets overall. The price rose as much as 10.5% at 2:46 p.m. ET and finished the day up 9.1% at $20.73. The stock price is down about 27% year to date (YTD).

The major indexes were all up big on Monday, as the Dow Jones Industrial Average was up 765 points (2.7%), the S&P 500 was up 93 points (2.6%), and the Nasdaq was up 240 points (2.3%).

So what

XP is an investment management company based in Brazil. Todayʻs market jump is in direct relation to the presidential election that was held in Brazil on Sunday. Several financial firms based in Brazil also climbed higher on Monday, as my colleague Bram Berkowitz reported earlier today. 

The election is not yet settled, but there will be a runoff on Oct. 30 between the two top vote-getters: former president Luiz Inacio Lula da Silva, a left-wing candidate, and current president Jair Bolsonaro, a right-winger. Silva got 48% of the vote, while Bolsonaro got 43%, but a runoff became necessary, as neither candidate reached the required 50% threshold to win outright.

The polls had suggested that Silva might win on Sunday with more than 50% of the vote, so the fact that he fell short of that likely sent some Brazilian financial stocks higher. The two candidates are pretty polarized, so the better-than-expected performance by Bolsonaro is seen as a catalyst to move Silva, who is more commonly known as Lula, to the political center. Overall, the Brazilian stock market was up 5.5% today.

Now what

Obviously, the runoff election on Oct. 30 will be a huge issue on the horizon, as it could not only represent a huge shift in policy, but there is the potential for some unrest, as Bolsonaro has questioned the validity of the voting machines and has hinted that he won't accept a loss.

Meanwhile, as an investment manager, XPʻs performance will be tied in large part to the movement of the stock market in Brazil. It is up 10% year to date, and some analysts say the market and economy will remain resilient, no matter who wins the election. But that could change, depending on the results of the election and the aftermath, so stay tuned for the Oct. 30 election results.