TV images showed Bolsonaro being carried on someone's shoulders in the middle of a crushing crowd of cheering supporters on one of the city's main streets when a knife was seen raised above heads just before it plunged into the candidate's body.
"Unfortunately it was more serious than we hoped", tweeted his son Flavio Bolsonaro. By Thursday evening, the right-wing lawmaker's condition had stabilised and Brazilian traders, who are partial to the candidate's free-market stance, had placed bets that the incident would fuel outpourings of sympathy and help propel him to the presidency.
Bolsonaro is described as a polarizing figure in Brazil, and is considered an "outsider" candidate. A medical team is evaluating whether Mr Bolsonaro can be transferred to another hospital in Sao Paulo.
The president's predecessor, Dilma Rousseff, warned that the attack can not go unpunished "because it must serve as an example so that it doesn't happen to any other candidate".
The attack was the latest freaky twist in a presidential race in which the most popular candidate, former president and leftist hero Luiz Inacio Lula da Silva, is trying to run from prison. That puts Bolsonaro in the lead position, though it is unclear how the attack might affect the campaign for the October 7 presidential ballot.
The public's anger is partially responsible for making this year's campaign the most unpredictable in years for Brazil, and the attack could lead to another seismic shift.
He could take two months to fully recover and will spend at least a week in hospital, the doctor who operated on Mr Bolsonaro said.
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A suspect, identified by authorities as 40-year-old Adelio Bispo de Oliveira, was arrested within seconds. However, despite his seemingly high popularity, Bolsonaro have so far failed to form any alliance with any major political forces in Brazil so far. More information about de Oliveira wasn't immediately available.
Air Bolsonaro was injured with a knife during an event in support of the state of Minas Gerais.
He has long espoused taking a radical stance on public security in Brazil, which has more homicides than any other country, according to United Nations statistics, and has openly praised Brazil's military dictatorship, which he has said should have killed more people.
Environmentalist candidate Marina Silva said the attack must be investigated and the perpetrators punished.
The former military officer is considered a far-right populist and is now leading the polls.
Fernando Haddad, who is likely to replace Lula as the Workers Party presidential candidate, said the stabbing was a "shame" and a "horror". 'They made Bolsonaro a martyr, ' said Jonatan Valente, a student. Also that month, Marielle Franco, a black councilwoman in Rio de Janeiro, was shot to death in March along with her driver after attending an event. "'I think the left shot itself in the foot because with this attack they will end up electing Bolsonaro'".