MP Stock Dips. Where It Goes From Here.

A rare earth magnet being inspected at MP Materials’ Independence facility in Fort Worth, Texas. (Courtesy MP Materials)

Key Points

• MP Materials stock increased more than 2% in premarket trading, following an 8.9% drop in the previous session.
• China’s new export approval requirement for rare earth minerals has impacted global markets and U.S.-China trade relations.
• reasury Secretary Scott Bessent stated the U.S. is in communication with China to de-escalate rare earth trade tensions.

MP Materials dipped on Thursday, nearing the end of a wild week for rare-earth players who found themselves suddenly caught up again in U.S.-China trade tensions.

With the rally fading, investors are left wondering what’s left for shares.

MP stock fell 6.6%, closing at $83.84, while the S&P 500 and Dow Jones Industrial Average fell about 0.6% and 0.7%, respectively.

MP snapped a four-day winning streak on Wednesday, when it closed down 8.9%. Still, the stock was up 24% over the past five days, coming into Thursday trading.

China sparked the rally. It controls some 85% of rare-earth material processing, and said last week it would require foreign suppliers to obtain government approval to export products containing certain rare-earth minerals. The move prompted President Donald Trump to threaten even higher tariffs on imports from the world’s second-largest economy.

On Wednesday, Treasury Secretary Scott Bessent directly addressed the rare-earth minerals dispute.

“China’s actions have once again demonstrated the risk of being dependent on them on rare earth, and for that matter, anything,” Bessent told reporters in Washington. “While there’s substantial actions we could take, we’d rather not…I believe China is open to discussion, and I am optimistic this can be de-escalated.”

Barron’s has highlighted MP as a winner in the trade war, which has led the U.S. to aggressively diversify supplies away from China. In July, the Defense Department took a stake in MP in a blockbuster deal, which included a price floor for rare-earth products and made the Pentagon a guaranteed customer for rare-earth magnets that MP is building capacity to produce.

The agreement transformed the industry overnight and sent shares of MP into the stratosphere. The stock started the year below $16 a share.

Where shares go from here is a reasonable question. Wall Street’s average price target is $83, a little below where it is. Analysts have had trouble keeping up with gains.

Investors should keep moving averages in sight. On the way up, moving averages can be levels where investors take profits. On the way down, they can be levels where investors buy dips.

For MP, the 50-day moving average is about $71, down 20% from where it is now. That is a steep drop, but it would still leave shares up some 460% this year.

The 100-day moving average is about $55. There’s no guarantee shares will drop. A lot has changed quickly for MP and the industry.

What investors can be more certain of is more volatility.

Write to Elsa Ohlen at elsa.ohlen@barrons.com and Al Root at allen.root@dowjones.com