“Follow the feds” replaces “follow the Fed” as financial market maxim

Lately, investors in the US stock market have enjoyed a variation on the classic “follow the Fed” theme, where investors just buy whatever the Federal Reserve is buying.

But this time, there’s a twist: don’t follow the Fed — follow the feds. That is, buy stocks of companies where the government has accumulated an equity position or is rumored to be doing so.

Intel has been a massive beneficiary of the US government taking an equity stake, which was later followed by an Nvidia partnership and investment.

Rare earths miner MP Materials has gained even more significantly thanks to an investment from the Pentagon.

Reports that the government will pursue a similar strategy with Lithium Americas prompted that stock to nearly double in a day last week.

Retail investors are clearly paying attention to this mantra. On Friday morning, Intel had more positive mentions on Reddit’s r/WallStreetBets forum over the previous 12 hours than any other stock had in overall mentions, per data from SwaggyStocks. And Lithium Americas was just outside the top five in total mentions during that time.

It’s the most stark example of a theme that’s been key for markets in 2025: the power of the Trump administration as a market catalyst. Policy decisions made in the executive branch, ranging from tariff carve-outs and export restrictions and reversals to personal and ideological relationships with the president, have made a clear mark on market giants like Apple, Nvidia, Palantir, and Tesla.

The Takeaway

Before getting too giddy over the prospect of “following the feds,” we’d be remiss not to point to China as an example of how, number one, the long-term performance of companies with a heavy government footprint leaves much to be desired, and number two, what are seemingly national champions or well-supported industries can see their stocks crushed by the state’s changing whims.