USA Rare Earth jumps after report of $1.6 billion U.S. investment for 10% stake

Shares of USA Rare Earth surged in premarket trading Monday, January 26, 2026, after reports said the Trump administration is set to take a 10% stake in the company as part of a $1.6 billion debt-and-equity investment package. The move is the latest in Washington’s effort to reduce reliance on China for critical minerals used in high-tech manufacturing, energy systems, and national defense.

Reuters reported the stock jumped sharply on expectations that the agreement and a separate private investment round would be unveiled Monday. The plan, according to the report, would make the federal government the company’s largest public shareholder, an unusually direct role for Washington in a single firm’s capital structure.

USA Rare Earth has positioned itself around both upstream and downstream pieces of the supply chain. The company has been developing a mine in Sierra Blanca, Texas, with Texas Mineral Resources, with plans that target an opening by 2028. It also has a magnet manufacturing facility in Stillwater, Oklahoma, that is expected to launch later in 2026—important because magnets are a crucial value-added component for electric motors, defense applications, and industrial equipment.

The stake fits into a broader industrial-policy trend: the federal government is using financing, grants, loans, and equity positions to accelerate domestic production capacity. Reuters noted that the administration has pursued equity stakes in other miners over the past year as part of a larger bid to boost U.S. output of strategically important materials and to strengthen processing and manufacturing steps that have historically been concentrated abroad.

For markets, the immediate significance is twofold. First, the news signals policy support that can lower funding costs and de-risk capital-intensive projects. Second, it reinforces the idea that the U.S. sees rare earths and related manufacturing not only as a commercial opportunity but as a strategic imperative, which could shape future permitting, procurement, and investment flows across the sector.