Why USA Rare Earth Shares Are Crashing Today—And What It Means for Tech Metals

USA Rare Earth stock just got hammered—down double-digits in early trading as supply chain realities clash with investor hype.

Behind the Plunge

Market sentiment soured fast after new export policies from key rare earth producers undercut pricing assumptions. Production delays at flagship projects didn’t help—nobody’s mining their way to profitability on PowerPoint slides.

Tech’s Dirty Little Secret

Every EV and smartphone depends on these unsexy metals, yet supply remains hostage to geopolitical whims. USA Rare Earth’s promise to domesticize sourcing now faces the oldest story in finance: overpromise, underdeliver, cash out.

Where’s the Bottom?

Until operational results replace press releases, this slide might just be getting started. Another reminder that in the materials game, hope isn’t a strategy—it’s a liability.

Image source: Getty Images.

News of a peer's magnet deal has USA Rare Earth investors repelled

Rare-earth-magnet producer Vulcan Elements signed a supply contract with ReElement for rare-earth oxides in mid-July, according to Reuters. While the companies refrained from providing specifics, they acknowledged that the pricing is "significantly below" the $110-per-kilogram floor that the U.S. Department of Defense ensured(MP -6.31%).

Over the past three months, shares of USA Rare Earth have soared more than 45% (as of this writing) on the growing interest in U.S.-based rare-earth production and the enthusiasm about USA Rare Earth's magnet production facility in Oklahoma, which is is scheduled to begin operations in Q1 2026. With considerable expectations baked into the stock price of USA Rare Earth, investors are disappointed that Vulcan Elements is stealing the spotlight today.

Plus, investors may fear that the pricing terms that Vulcan Elements and ReElements agreed upon may not bode well for USA Rare Earth.

What's a USA Rare Earth investor to do now?

With rare-earth elements playing a vital role in so many of the technologies now critical to the defense industry and others, the demand for rare-earth magnets will remain strong for the foreseeable future, and there is sure to be more than one winner among producers of rare-earth magnets. At this point, investors should stay the course, but if USA Rare Earth fails to ink agreements while its competitors do, that may indicate that it's time to reevaluate.