Stock Market Today, Jan. 26: USA Rare Earth Jumps After Securing $1.6 Billion Government Funding Commitment

USA Rare Earth (NASDAQ:USAR), a rare-earth mining and magnet developer, closed Monday at $26.72, up 7.87%. The stock moved higher after confirmation of a $1.6 billion government-backed funding package. Trading volume reached 121.1 million shares, about 796% above its three-month average of 13.5 million shares. USA Rare Earth IPO'd in 2025 and has grown 44% since going public.

How the markets moved today

The S&P 500 added 0.50% to finish Monday at 6,950, while the Nasdaq Composite rose 0.43% to close at 23,601. Within rare-earth mining and magnet manufacturing, industry peers MP Materials closed at $63.44 (-8.83%) and Lithium Americas finished at $5.98 (-7.14%) as investors rotated toward newly funded domestic projects.

What this means for investors

USA Rare Earth confirmed it would receive roughly $1.6 billion from the U.S. Commerce Department in a debt-and-equity deal that’ll see the U.S. take a 10% minority stake in the company. While the deal offers the potential for shareholder dilution, it also signals a major vote of confidence from the U.S. government — and gives it serious financial firepower.

This $1.6 billion will be combined with another $1.5 billion raised by USA Rare Earth in a separate Private Investment in Public Equity (PIPE) deal, giving the company ample funding to build out its mining and magnet manufacturing facilities in Oklahoma and Texas. With the U.S. government determined to reduce its reliance on foreign countries for the critical minerals the company mines, USA Rare Earth will remain an interesting stock to monitor.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.