Shares state-run oil company Petroleo Brasileiro dropped 1 percent despite rising oil prices. The company comprises about one-fifth of the index.
Brazil's currency strengthened about 0.9 percent to 1.94 reals to the U.S. dollar. The central bank is expected to cut its benchmark Selic interest rate by 75 basis points to a record low 9.5 percent this week. The rate was 13.75 percent in January, when the bank slashed rates for the first time since 2007.
Mexico's IPC index, meanwhile, gained 0.7 percent to 25,107, its third-highest close since Oct. 1. Autopart and petrochemical maker ALFA was the biggest gainer, up 7.3 percent, while shares in low-cost homebuilders Desarrolladora Homex and Corporacion Geo rose 5.3 percent and 5.2 percent. The three companies comprise 1.54 percent of the index.
The peso weakened about 1 percent to 13.58 to the dollar as Mexico's central bank said annual inflation had slowed to 5.98 percent in May, a slightly bigger drop than had been expected.
Slowing inflation may further free policy makers to reduce interest rates for a sixth straight month when they meet on June 19. Analysts had expected a 50 basis point cut to 4.75 percent, according to a survey published by Grupo Financiero Banamex last week. Such reductions often make higher-yielding stocks more attractive investments than local currency bonds.
Elsewhere, Argentina's Merval stock index rose 1 percent to 1,642 on Tuesday, while Chile's IPSA gained 0.4 percent to 3,213 and Colombia's IGBC rose 0.2 percent to 9,430.
Latin American stocks have been pummeled by the world economic crisis, which has slashed demand for the commodity exports on which many of the region's biggest companies rely. Yet local markets have outpaced gains in the U.S. and Europe as investors bet that an economic recovery will revive demand for risk and raw materials. Both Brazil's Ibovespa and Mexico's IPC indexes have soared almost 50 percent from their lows on March 3.
U.S. stocks dipped slightly on Tuesday, with the Dow Jones Industrial Average sliding 0.02 percent to 8,763 in New York.