Catenaa, Saturday, August 29, 2026- Traders see risks in the US government’s equity positions in publicly traded companies as polls suggest midterm elections could sway towards Democrats.
There’s no doubt that the government’s involvement has lifted the stock prices of many of the companies in which it has taken stakes.
The trend kicked off a rush among investors, particularly mom-and-pop traders, to identify potential investments before they were announced, as the correct pick all but guaranteed at least an initial surge and pointed to longer-term upside.
Intel shares have soared over 300% in the year since the initial report that the Trump administration was in talks to take an ownership stake in the chipmaker.
MP Materials is up 87% since last July, when the Department of Defense made a $400 million equity investment in the rare earth minerals upstart.
And Trilogy Metals has gained 73% since October, when the US government agreed to take a 10% stake in the Canadian minerals exploration company in a deal that included approval for an Alaska road project that was essential to accessing areas where it has mining claims.
However, those numbers have largely come in bursts. Trilogy Metals’ US shares jumped from $2.09 a share to a high of $10.60 within days of the deal announcement, then they quickly gave up those gains and are now trading for $3.62.
MP Materials soared more than 150% within five weeks of the government taking a stake, but it’s down nearly 27% in the year since then.
Intel is a slightly different case because it’s also caught up in the mania for chip stocks as spending on artificial intelligence creates extreme demand for semiconductors.
Intel stock rose steadily as earnings improved, peaking in June after Trump said Apple Inc. will work with the company to design and produce semiconductors in the US. But it’s down 37% since then, the fifth-worst performance in the S&P 500 Index over that stretch.
Part of the skepticism surrounding Intel involves a shareholder lawsuit against the company’s board, the US Department of Commerce, and Commerce Secretary Howard Lutnick, seeking to unwind the government’s ownership position. If it’s successful, investors will have to assess the durability of the administration’s entire portfolio.
The more conventional concern about the stocks is the highly partisan environment in DC.
If the Democrats gain control of the Senate or House of Representatives, they can hold hearings and subpoena witnesses.
Democratic Senator Elizabeth Warren, who’s in line to chair the Senate Banking Committee if the party wins the chamber, has already written Lutnick, questioning the Intel investment.
And party leaders are laying the groundwork to investigate companies with ties to the Trump administration and the president’s family.
