Why USA Rare Earth Stock Is Plummeting Today
Key Points
President Trump characterized the threat that China posed regarding rare-earth metals as "completely gone."
USA Rare Earth is developing a rare-earth magnet production facility that's expected to commence operations in early 2026.
Today provides a great buying opportunity for investors with USA Rare Earth on their radars.
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Sometimes just a few words can drive steep price swings in a stock. While it may seem hyperbolic, it's becoming glaringly apparent today as USA Rare Earth (NASDAQ: USAR) stock is sinking lower in response to President Donald Trump's characterization of China's threat with respect to rare-earth metals.
As of 10:44 a.m. ET, shares of USA Rare Earth are down 11.1%.
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Rare-earth threat? What rare-earth threat?
Responding to a question during a 60 Minutes interview that aired last night about the recent deal with China and it threatening the supply of rare-earth metals, President Trump commented, "We got-- no rare-earth threat. That's gone, completely gone."
Investors are especially sensitive to Trump's commentary regarding rare-earth metals since it was the fear of China implementing controls that drove the stocks of U.S.-based rare-earth stocks like USA Rare Earth sharply higher over the past few weeks.
Should investors follow suit and click the sell button based on Trump's comments?
It's unsurprising that shares of USA Rare Earth are in free fall today after learning of the apparently non-existent threat that China now poses regarding rare-earth metals. It's important to remember, however, that Trump's perspective seems a bit hyperbolic. China, in fact, only agreed to delay its rare-earth controls for one year -- not eliminate them completely. Therefore, it seems the threat isn't "completely gone," just lurking in the shadows as the country still dominates rare-earth metals supply.
With operations at its new rare-earth magnet production facility expected to start in early 2026, USA Rare Earth remains a valid option for rare earth investors who have a higher risk threshold, and they now have an opportunity to load up on shares of the mining stock at a much better price point than before the weekend.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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