Rare earth stocks fall on hopes of easing U.S.-China tensions reducing scarcity premiums.

U.S. rare earth stocks like USA Rare Earth, MP Materials, and Critical Metals dropped 2-5% amid reports of a possible U.S.-China summit aimed at easing trade tensions. The diplomatic thaw threatens the scarcity premium that has driven these stocks higher, as China controls much of the supply chain. USA Rare Earth recently broke ground on a $1.2 billion factory, but the potential summit could reduce urgency for domestic supply development. Investors will watch for confirmation of the meeting and any trade agreements that could impact the sector's outlook.