USA Rare Earth Inc. (USAR) experienced a significant downturn on Thursday, with its stock plummeting 5.40% over the past 24 hours. This sharp decline comes amid broader volatility in the rare earth sector and escalating U.S.-China tensions over rare earth elements.

The day's trading saw a dramatic reversal for USAR, which had initially posted gains of over 2% in premarket trading. However, as regular trading began, the stock's fortunes quickly soured, with intraday losses reaching as much as 11.43% at one point. This abrupt shift from optimism to pessimism reflects the current uncertainty plaguing the rare earth market.

At the heart of this volatility are the ongoing geopolitical tensions between the United States and China. Recent reports indicate that Chinese state media has issued a rebuttal to U.S. calls for Beijing to reduce its control over rare earth exports. With China set to implement new export restrictions on November 8, and the U.S. threatening to reimpose significant tariffs on Chinese goods, the rare earth market finds itself caught in the crossfire of a larger trade dispute. As these tensions continue to unfold, investors in USA Rare Earth and other companies in the sector may face further uncertainty and market volatility in the coming days.