Rare-Earths Stocks Tumble on U.S.-China Trade Progress. Why the Volatility Is Just Getting Started.

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

Key Points

• Rare-earths stocks, including MP Materials, fell in premarket trading following positive U.S.-China trade talks over the weekend.
• Treasury Secretary Scott Bessent anticipates China will defer tightened export controls on rare earth materials after negotiations.
• The potential deferral of China’s export curbs could negatively impact rare-earths sector shares but will not stop Western development of these materials.

MP Materials and other rare-earths stocks fell sharply ahead of the open Monday after the U.S. and China struck a positive tone on their trade talks over the weekend.

Treasury Secretary Scott Bessent said he expected China to defer its tightened export controls on rare earth materials as a result of negotiations with his Beijing counterparts in Malaysia over the weekend.

Shares of MP Materials , the largest producer of rare earth materials in the Western Hemisphere, fell 5.7% to $66.81 in premarket trading after jumping 3.5% Friday. The stock is still up more than 350% in 2025. USA Rare Earth stock was down 7.7%, while Ramaco Resources fell 5.7% ahead of the open.

Rare earth materials are essential for the technology industry, as well for autos, defense and renewable energy companies.

The details remain vague—Bessent told NBC News he anticipates “some kind of deferral” on the curbs China has discussed but that it’s up to President Donald Trump and China’s Xi Jinping.

The two leaders will talk in person Thursday in what’s likely to be a hugely significant meeting both for the rare-earths sector and for global trade. The framework hailed by Bessent is for Trump and Xi to discuss, and potentially finalize.

A move by Beijing to lift its export curbs could be perceived as negative for the sector shares, Barron’s argued last week. However, the truce won’t halt development of rare-earth materials in the West—far from it. The U.S. is eager to reduce its dependence on China for the materials.

Write to Callum Keown at callum.keown@barrons.com