Rare-earth stocks fell on Tuesday, despite more good news on Monday.

Investors are closely watching how the U.S. is trying to move away from a reliance on China for the minerals, which are key components in everything from electric vehicles, military equipment, and chips.

On Monday, President Donald Trump and Australia’s Prime Minister Anthony Albanese signed a critical-minerals agreement designed to unlock more capital for the sector. Albanese, speaking alongside Trump from the White House, said the deal included an $8.5 billion project pipeline.

The White House subsequently published a fact sheet saying the two countries would invest more than $3 billion in critical-mineral projects over the next six months, with recoverable resources in the projects estimated to be worth $53 billion.

The deal means more capital for the rare-earths industry, which translates into faster growth and less risk for the sector.

That dynamic has shown up in stock prices. Coming into Tuesday trading, shares of MP Materials—the largest producer of rare earths in the Western Hemisphere—were up 431% year to date, boosted by adeal with the Defense Departmentto ensure future domestic mineral supply. Shares of other rare-earth companies USA Rare Earth, and Ramaco Resources were up 175% and 365%, respectively, ahead of Tuesday’s session.

The three stocks, however, were down an average of 13% over the past week. Losses extended on Tuesday, with MP stock off 11%. USA Rare Earth and Ramaco shares fell 15% and 13%, respectively.

Why shares were tanking after more good news early in the week is a good question. For starters, shares looked stretched because they have quickly moved higher. That can set up a scenario in which investors start to take profits.

Barron’s technical analyst Douglas Busch says that all three stocks could fall another 15% to 25%, but that would still leave the trio up an average of about 230% this year.

He isn’t making a fundamental call on rare-earth markets. Busch looks at stock charts and market history to understand investors’ behavior.

Investors might also be a little worried that all the capital won’t flow into the U.S.; Australian company Lynas Rare Earths is a large processor of rare-earth materials. The new agreement implies that the U.S. is happy to take products from allies.

The third reason for recent dips is that the market is forward-looking. Rare-earth shares have been strong most of the year, since China threatened export restrictions on the materials. China dominates production, with an estimated 85% of global refining capacity.

Investors tend to “buy the rumor” and “sell the news,” meaning stock prices reflect what is going to happen and not just what has actually occurred.

Investors might also be struggling with valuation. The U.S. essentially produced no rare-earth materials a few years ago. Now, MP will produce roughly 10,000 tons of rare earth magnets annually by the end of the decade, with an unprecedented pricing structure put in place by the Defense Department.

How to value that isn’t easy. MP shares trade for about 23 times the company’s estimated 2030 earnings before interest, taxes, depreciation, and amortization, or Ebitda. Shares of Howmet, a leader in aerospace materials, trade for about 23 times estimated 2029 Ebitda. How estimates and valuation multiples will develop for either company years from now is hard to say.