USA Rare Earth Inc. (USAR) shares plummeted 15.59% during pre-market trading on Thursday, leading a broad sell-off in the rare earth and critical minerals sector.

The sharp decline followed multiple reports indicating a major policy shift from the Trump administration, which is stepping back from plans to guarantee minimum prices, known as price floors, for U.S. critical minerals projects. This reversal from previous commitments suggests reduced government support for stabilizing revenue in the sector, which industry executives have long viewed as a crucial tool to compete with China's state-backed producers.

Officials communicated at a closed-door meeting earlier this month that future projects would need to prove financial independence without such government backstops, casting doubt on the economic viability of investments for companies like USA Rare Earth and sparking a sector-wide downturn.