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 (USAR 13.03%) 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%.
Image source: Getty Images.
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."
NASDAQ: USAR
Key Data Points
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.
