Combine the garlic powder, onion powder, black pepper, and salt. Season the chicken with the seasoning.
Set the Instant Pot to Saute, add the olive oil. Add in the chicken pieces to brown all sides, about 6 minutes. Once the chicken is brown, remove and set aside.
If needed, add another tablespoon of olive oil. Add in the onions, saute for a minute. Stir in the red pepper and mushrooms, and garlic. Saute another 2 minutes to soften the veggies.
Add in the balsamic vinegar and white wine. Use a wooden spoon to scrape up any brown drippings at the bottom of the Instant Pot. (This brings flavor but also helps prevent the burn code on the Instant Pot).
Mix in the chicken stock, diced tomatoes, tomato paste, Kalamata olives, bay leaf, Italian Seasoning, and dried parsley. Stir ingredients. Add back in the chicken pieces.
Press Cancel on the Instant Pot. Place lid on Instant Pot, lock and turn the steam valve to close. Select pressure cooking, High, 10 minutes.
Once the timer goes off, natural release for about 5 minutes. Then switch to a quick-release. Consult manufacturer's instructions if needed for operating your Instant Pot. Remove cover and discard bay leaf.
Serve the Chicken Cacciatore with your favorite sides. Low-carb choices are roasted spaghetti squash, zoodles, mashed cauliflower. Other choices are mashed potatoes or your favorite pasta. Sprinkle with Parmesan Cheese and fresh basil or parsley for garnish.