USAR rises after securing federal funding to advance domestic rare earth element processing capacity amid trade tensions with China.
USA Rare Earth (NASDAQ: USAR) climbed 6.3% midday after the U.S. government awarded the company a $19.3 million contract to develop a pilot-scale rare earth separations project. The funding aims to boost domestic processing capacity for critical materials.
The move follows ongoing trade tensions with China, which dominates rare earth production. Earlier reports indicated no breakthrough in U.S.-China trade negotiations over rare earth exports, reinforcing the need for domestic alternatives. The administration has also pledged $2 billion for quantum computing, signaling broader support for strategic industries.
Investors view the funding as a sign of sustained government backing for rare earth development, reducing reliance on foreign supply chains.