U.S. Senate Tax Bill Through an Industry Lens: A Win for Chip Stocks, a Relief for Solar Shares

TradingKey - On July 1, the U.S. Senate passed Trump’s tax and spending bill by a razor-thin one-vote margin. The revised version includes enhanced tax credits for semiconductor manufacturers, while notably excluding feared tariffs on imported wind and solar components — bringing relief to clean energy stocks and optimism to chipmakers.

Under the Senate version of the “Big Beautiful Bill”, semiconductor companies that build new factories in the U.S. before the original 2026 sunset date under the CHIPS and Science Act will be eligible for a 35% investment tax credit, up from the current 25% and higher than the previously expected 30%.

Media reports noted that this expanded tax incentive further strengthens the pro-semiconductor policies introduced during the Biden administration — with potential beneficiaries including Intel, TSMC, Micron, and other major players in the industry.

Earlier on July 1, rising concerns over weaker-than-expected Fed rate cut prospects weighed on U.S. equities. The Philadelphia Semiconductor Index (SOX) fell more than 2% intraday, before rebounding slightly after the Senate vote — closing down 0.70%. The iShares PHLX Semiconductor ETF (SOXX) ended the session down 0.45%.

SOXX Price, Source: TradingKey

Solar Sector Gets Temporary Reprieve

The Senate bill also brought some relief to the clean energy sector, which had been under pressure due to Trump’s long-standing preference for fossil fuels over renewables.

Prior to the vote, media reported that the bill might include two provisions that would raise costs for the renewable energy industry:

1. A new excise tax on wind and solar projects using specific imported components
2. An earlier deadline — now proposed as end-2027 — for qualifying for existing tax credit programs

However, these controversial measures were not included in the final version passed by the Senate, prompting a midday turnaround in solar stock prices.

Among the biggest winners were:

• Sunrun (RUN) +10.51%
• NextEra Energy (NEE) +5.24%
• Invesco Solar ETF (TAN) +2.86%

Invesco Solar ETF (TAN)  Price, Source: TradingKey

This outcome suggests that while Trump favors traditional energy development, the Senate version of the bill may still allow room for certain clean energy incentives — at least in the short term.