Industrial Policy (CHIPS, IRA)

Industrial policy is when the government actively supports specific industries or sectors through subsidies, tax breaks, or regulations—rather than letting the free market decide. You'll hear about it when Congress passes big spending bills like the CHIPS Act (which funds semiconductor manufacturing) or the Inflation Reduction Act (which subsidizes clean energy). It matters to investors because these policies can make certain industries suddenly more profitable, create new winners and losers, and shift where companies choose to build factories. For example, if the government offers tax credits for solar panel makers, companies in that space might see their costs drop and stock prices rise. Industrial policy is basically the government picking favorites.