Daqo New (DQ) saw its stock price plummet 5.69% in pre-market trading on Tuesday, as the U.S. solar energy sector faced a potential setback. The sharp decline comes in response to proposed changes to President Donald Trump's tax-cut and spending bill, which could significantly impact the solar industry.

Republicans controlling the U.S. Senate Finance Committee have unveiled modifications to the "One Big Beautiful Bill Act" that would phase out solar, wind, and energy tax credits by 2028. This move has sent shockwaves through the solar energy sector, with multiple companies experiencing substantial pre-market losses. Industry peers such as Sunrun, SolarEdge, and Enphase Energy saw even steeper declines, with their shares falling by 27%, 21%, and 17% respectively.

The potential elimination of these tax credits poses a significant threat to the solar industry, which has relied on government incentives to drive growth and adoption. This development comes at a particularly challenging time for the sector, which is already grappling with weak U.S. residential demand due to high interest rates and recent metering reforms in California, a key market for solar energy. As investors digest the implications of these proposed changes, Daqo New and its peers may face continued pressure in the near term.