USA Rare Earth Inc. (USAR) experienced a significant downturn on Thursday, with its stock plummeting 5.40% over the past 24 hours. The sharp decline came as part of a broader selloff in the rare earth sector, reversing earlier premarket gains and reflecting growing investor concerns over escalating U.S.-China tensions.

The day's trading saw dramatic swings for USAR, with the stock initially posting gains of over 2% in premarket trading, only to reverse course sharply as regular trading began. By mid-day, USAR had fallen more than 10%, with some reports indicating an intraday drop of as much as 11.43%. This volatility was mirrored across the rare earth sector, with other companies such as NioCorp and American Resources also experiencing significant declines.

The primary driver behind this sector-wide selloff appears to be the ongoing geopolitical tensions between the United States and China over rare earth elements. Recent reports indicate that Chinese state media has rebutted U.S. calls for Beijing to reduce its control over rare earth exports, labeling new U.S. export restrictions as "a global supply-chain power grab." With China set to implement new measures on November 8, and the U.S. threatening to reimpose significant tariffs on Chinese goods, investors are growing increasingly wary of the potential impact on companies like USA Rare Earth. As these geopolitical tensions continue to unfold, the rare earth market may face further uncertainty and volatility in the coming weeks.