Wednesday, January 28, 2026-Stocks tied to rare earth minerals experienced sharp swings this week after news that the Trump administration is taking a significant stake in USA Rare Earth (USAR) as part of a $1.6 billion financing package designed to build a domestic supply chain for critical minerals and reduce dependence on China.
USA Rare Earth shares initially surged strongly on the announcement, briefly trading well above recent levels, before closing with more modest gains, reflecting mixed investor sentiment about government involvement in the sector. Meanwhile, several other rare earth and critical mineral stocks that rallied earlier in the session finished the day sharply lower, underlining persistent volatility in the market.
The administration’s investment includes cash and loans directed at expanding mining and magnet‑manufacturing operations in the United States, and gives the government warrants that could raise its ownership stake further.
This level of federal involvement part of a broader strategy that has seen stakes acquired in other miners was enough to initially lift market confidence, since it signals strong policy support for domestic producers. But traders reacted later to profit‑taking and concerns about over‑valuation in the highly speculative rare earth sector, dragging down many stocks that had earlier benefited from the bullish news.
Notably, companies like MP Materials and other peers in the rare earth space saw share price declines as investors reassessed the implications of the government move. This back‑and‑forth activity underscores how dependent these stocks are on policy actions and broader market sentiment rather than underlying earnings and highlights the risks investors face as Washington pushes to shore up strategic supply chains at a time of ongoing global competition for critical minerals.
0 Comments