U.S. rare earth mining stocks surged Monday despite President Trump walking back his weekend tariff threats against China. After saying on Friday he would impose “massive” tariffs over China’s rare earth export controls, Trump posted on Truth Social Sunday that relations with China “will all be fine,” sending broader markets sharply higher.
The S&P 500 climbed 1.4% Monday while the Nasdaq popped 2.1% as the trade war fears that wiped out $2 trillion in market value Friday eased. Yet rare earth stocks maintained strong gains, with some posting double-digit increases even as Trump softened his rhetoric.
The divergence highlights an important point: regardless of near-term tariff threats, Washington’s commitment to reducing dependence on Chinese rare earth supply chains remains bipartisan and structural. JPMorgan Chase announced Monday it would invest up to $10 billion in industries crucial to U.S. national security, including critical minerals. The Defense Department is also accelerating its effort to stockpile $1 billion worth of critical minerals.
China expanded export controls to five additional rare earth elements and imposed controls on technology, equipment, and labor used for refining the minerals. These restrictions underscore U.S. vulnerability in a supply chain where China controls 70% of global mining and 90% of processing.
MP Materials (MP)
MP Materials is the largest U.S. rare earth miner and operates the only rare earth mine and processing facility in the United States at Mountain Pass, California. In July 2025, the Department of Defense invested $400 million in MP Materials via preferred equity, making the DOD the company’s largest shareholder.
The Pentagon Price Floor
Under the DOD deal, the Pentagon set a price floor of $110 per kilogram for neodymium-praseodymium oxide (NdPr), a key input in rare-earth magnets. The government pays MP the difference when the market price is below $110 but takes 30% of the upside when the price exceeds $110.
This unprecedented arrangement provides revenue stability that allows MP Materials to invest confidently in expanding production capacity. The price of NdPr surged 40% following the MP deal announcement.
Apple Partnership and Growth
MP Materials signed a $500 million deal with Apple to produce rare earth magnets in the U.S. using only recycled materials. Starting in 2027, MP Materials will supply magnets for hundreds of millions of Apple devices, including iPhones, iPads, and MacBooks.
MP Materials’ second-quarter 2025 revenues surged 84% year over year to $57.4 million. The company produced 597 metric tons of NdPr, a 119% increase from the year-ago quarter.
Recent Stock Performance
MP Materials rallied about 20% on Monday following Trump’s tariff threats, adding to significant gains earlier in the year. The stock reached its all-time high on October 10, 2025, at $84.92.
Investment Considerations
MP Materials remains unprofitable, with the consensus estimate for fiscal 2025 showing a loss of 34 cents per share. However, fiscal 2026 earnings are projected at 91 cents per share, suggesting a path to profitability as production scales.
The government backing provides unique downside protection through the price floor mechanism while the Apple partnership demonstrates commercial validation beyond defense applications.
USA Rare Earth (USAR)
USA Rare Earth is developing a vertically integrated, domestic supply chain for rare earth magnet production, with a facility in Stillwater, Oklahoma, and mining rights to the Round Top heavy rare earth deposit in West Texas.
Recent Developments
In late September 2025, USA Rare Earth unveiled a deal to acquire Less Common Metals of the U.K., adding an outside-China capability for metals and alloys. On September 29, the company announced that Barbara Humpton would become CEO effective October 1, 2025. Humpton previously served as CEO of Siemens USA.
On October 3, Humpton told CNBC that USA Rare Earth is in “close communication” with the White House. The stock jumped 23% that day, pushing the company’s market capitalization to nearly $3 billion.
Stock Performance
USA Rare Earth soared more than 25% on Monday amid the trade tensions. The stock reached its all-time high on October 10, 2025, at $37.85, up from a low of $5.56 in March 2025.
Roth Capital raised its price target on USA Rare Earth to $40 from $20 on October 10, citing progress toward establishing an alternative rare earth supply chain outside China.
The Speculative Profile
USA Rare Earth is not expected to begin generating revenue until 2026, nor profits before 2028. The company made its first sintered magnets in January 2025, but operations remain in early stages.
USA Rare Earth trades at a $3 billion market capitalization with minimal revenue, pricing in perfect execution before proving commercial output. The valuation reflects speculation about potential government investment similar to the MP Materials deal, though no such arrangement has been announced.
Risk and Opportunity
The company represents an extremely speculative bet on Washington’s determination to build domestic rare earth capacity. If USA Rare Earth delivers and wins government backing similar to MP Materials, it could charge premium prices to defense contractors, automakers, and industrial customers desperate for non-Chinese suppliers.
However, investors should recognize this remains years from profitability with significant execution risk across multiple fronts: integrating the U.K. acquisition, ramping Oklahoma production, and advancing the Texas mining project.
Energy Fuels (UUUU)
Energy Fuels is a leading U.S. uranium and rare earths company that operates the White Mesa mill in Utah. The company finished construction of Phase 1 REE separation infrastructure at White Mesa in early 2024, and in June reported successful commercial production of separated NdPr that meets specifications required for REE-based alloy manufacturing.
Diversified Feedstock Strategy
Following its 2023 acquisition of the Bahia heavy mineral sands project in Brazil, Energy Fuels made multiple deals in 2024 to acquire feedstock for White Mesa. In early June 2024, Energy Fuels executed a joint venture giving it the option to earn a 49% stake in Astron’s Donald rare earths and mineral sands project in Victoria, Australia.
Donald is expected to begin production as early as the end of 2027 and will supply the White Mesa mill with 7,000 to 8,000 metric tons of monazite sand in rare earths concentrate annually in Phase 1.
In October 2024, Energy Fuels acquired Base Resources, which owns the Toliara project in Madagascar.
Recent Performance
Energy Fuels jumped over 16% on Monday as investors focused on rare earth exposure. Energy Fuels’ stock has surged nearly 200% since the MP Materials-DOD deal on July 10, as investors speculate it could be a deal target for the Trump administration.
CEO Commentary
Energy Fuels CEO Mark Chalmers said the federal government needs to invest in additional miners to diversify the rare-earth supply chain. “The government cannot bet on one horse — it just doesn’t make sense,” Chalmers said.
Energy Fuels recently announced that its high-purity NdPr oxide has been manufactured into commercial-scale rare-earth permanent magnets by POSCO International Corp, meeting stringent quality requirements for use in high-temperature drive unit motors installed in electric and hybrid vehicles.
Financial Position
Energy Fuels’ revenues plunged 52% year over year to $4.2 million in the second quarter due to lower uranium sales volumes. The company recorded a loss of 10 cents per share in the quarter.
Unlike USA Rare Earth, Energy Fuels generates revenue from uranium operations while building rare earth capabilities. The company’s debt-free balance sheet provides financial flexibility to develop its REE business without immediate profitability pressure.
Investment Thesis for Rare Earth Stocks
The U.S. is almost entirely dependent on China, which supplied 70% of rare earth imports in 2023. China has manipulated the market by suppressing prices to drive Western competition from the market.
The current trade tensions have created political will for domestic rare earth development that didn’t exist previously. Washington’s willingness to take equity stakes and provide price floors represents a fundamental shift in U.S. industrial policy.
Key Catalysts
The November 1 deadline for Trump’s threatened 100% tariffs creates near-term urgency, though the president appeared to dial down his rhetoric on Sunday, saying the situation with China will “be fine.”
JPMorgan’s $10 billion commitment to national security industries and the Defense Department’s $1 billion critical minerals stockpiling effort signal sustained institutional support beyond government intervention.
Risk Factors
Trade tensions could de-escalate, reducing urgency for domestic production. Rare earth prices remain volatile and subject to Chinese market manipulation. Most U.S. producers remain unprofitable with uncertain timelines to positive cash flow.
The stocks have surged dramatically in recent months, with valuations pricing in optimistic scenarios. Near-term pullbacks would not be surprising after such strong runs.
Portfolio Positioning
MP Materials offers the most established operations with government backing already secured. USA Rare Earth represents the highest-risk, highest-potential-reward speculation on government support. Energy Fuels provides diversified exposure through uranium operations while building rare earth capabilities.
For investors seeking rare earth exposure, MP Materials’ combination of operational scale, Pentagon partnership, and Apple commercial validation makes it the most defensible position. The other two offer leveraged bets on expanded government support but carry significantly higher execution risk.
