USA Rare Earth (USAR) Surges 17% on Strategic Supply Chain Breakthrough – What’s Fueling the Rally?

Summary
• USA Rare Earth (USAR) surges 17.26% intraday to $16.44, driven by a landmark supply agreement with Arnold Magnetic Technologies and Solvay.
• The stock trades at its 52-week high of $16.62, with a 10.09% turnover rate and a dynamic P/E of -6.61.
• LCM’s acquisition in November 2025 and the Stillwater magnet plant’s Q1 2026 commissioning timeline underpin the bullish momentum.
• Sector peers like MP Materials (MP) gain 2.64%, reflecting broader rare earth supply chain resilience.

USA Rare Earth’s explosive 17% intraday rally on December 4, 2025, underscores a strategic pivot in the rare earth sector. The stock’s surge follows a pivotal supply agreement between its subsidiary Less Common Metals (LCM) and Arnold Magnetic Technologies, a Compass Diversified subsidiary. With LCM now supplying ex-China rare earth materials for advanced magnet production, USAR’s market position strengthens amid U.S. and European efforts to decouple from Chinese supply chains. The move aligns with the company’s Q1 2026 commissioning of its Stillwater, Oklahoma magnet plant, positioning it as a key player in the global rare earth renaissance.

Strategic Supply Chain Agreement Ignites Investor Optimism
USA Rare Earth’s 17.26% intraday surge is directly tied to its subsidiary LCM’s supply agreement with Arnold Magnetic Technologies and Solvay. This partnership ensures a reliable, ex-China source of rare earth materials for Arnold’s advanced permanent magnet production, a critical component for aerospace, defense, and energy sectors. The deal, announced on December 4, 2025, follows USAR’s November 2025 acquisition of LCM, which provides high-grade NdPr alloys and strip cast essential for magnet manufacturing. CEO Barbara Humpton emphasized the collaboration’s role in rebuilding resilience in the rare-earth ecosystem outside China. With the Stillwater magnet plant on track for Q1 2026 commissioning, the agreement not only secures LCM’s role in USAR’s supply chain but also positions the company to meet growing demand for rare earth materials in defense and industrial applications.

Rare Earth Sector Gains Momentum as USAR Outperforms Peers
The rare earth sector, led by MP Materials (MP) with a 2.64% intraday gain, reflects broader optimism about supply chain diversification. USAR’s 17.26% rally far outpaces MP’s performance, driven by its strategic acquisition of LCM and the Stillwater plant’s proximity to commercial production. Sector peers like Graphite One (G1) and Namibia Critical Metals (NMI) also report progress in rare earth projects, but USAR’s direct alignment with U.S. defense and industrial priorities—coupled with its $400 million cash position—positions it as a standout. The sector’s momentum is further fueled by geopolitical tailwinds, including the 2027 DFARS ban on Chinese-origin rare earth materials in U.S. defense platforms, which accelerates demand for domestic producers like USAR.

Options and Technicals: Capitalizing on USAR’s Bullish Momentum
• Kline pattern: Short-term bullish trend (confirming upward momentum)
• MACD: -1.99 (Signal Line: -2.25, Histogram: 0.26) – positive divergence suggests strength
• RSI: 36.08 (oversold territory, hinting at potential rebound)
• Bollinger Bands: Upper (18.38), Middle (14.52), Lower (10.65) – price near upper band indicates overbought conditions
• 30D MA: 16.56 (just below current price), 100D MA: 17.54 (resistance ahead)

USAR’s technicals and options chain present a compelling case for aggressive bulls. The stock’s 17.26% rally has pushed it near its 52-week high of $16.62, with RSI in oversold territory and MACD showing positive divergence. Two top options stand out: USAR20251212C16.5 and USAR20251219C17.

USAR20251212C16.5 (Call, $16.5 strike, 12 Dec 2025):
• IV ratio: 120.18% (high volatility)
• Leverage ratio: 13.68% (moderate)
• Delta: 0.528 (moderate sensitivity to price)
• Theta: -0.102 (rapid time decay)
• Gamma: 0.1285 (high sensitivity to price changes)
• Turnover: 34,566 (liquid)
• Price change ratio: 455% (strong momentum)
This contract benefits from high gamma and IV, making it ideal for a short-term rally. A 5% upside to $17.26 would yield a payoff of $0.76 per contract, offering 22% returns on the strike price.

USAR20251219C17 (Call, $17 strike, 19 Dec 2025):
• IV ratio: 112.46% (high)
• Leverage ratio: 12.62% (moderate)
• Delta: 0.490 (moderate sensitivity)
• Theta: -0.065 (moderate time decay)
• Gamma: 0.1032 (high sensitivity)
• Turnover: 166,600 (high liquidity)
• Price change ratio: 237.5% (strong)
This option’s high liquidity and gamma make it a safer bet for a sustained move. A 5% upside to $17.26 would yield a $0.26 payoff, translating to 15% returns on the strike price.

Action Insight: Aggressive bulls should prioritize USAR20251212C16.5 for a short-term pop, while USAR20251219C17 offers a balanced play on USAR’s potential to test $18.38 (Bollinger upper band). Monitor the 12 Dec expiry for immediate momentum and the 19 Dec contract for a longer hold.

Backtest USA Rare Earth Stock Performance
It looks like the event-level back-test could not be completed because, after screening the 2022-present data set, no trading days satisfied the “intraday high ≥ 17 % above the previous close” rule. When the engine tried to calculate post-event statistics, the event list was empty, which triggered the internal error you saw (an empty sequence was passed to a statistics function).How would you like to proceed?1. Lower the surge threshold (e.g., 15 %, 12 %, or 10 %) and rerun the back-test. 2. Keep the 17 % definition but widen the historical window (for example, start from 2018 or 2015) to see if any events appear. 3. Examine the raw price series together to confirm whether any 17 % intraday spikes exist, then decide on next steps. 4. Cancel the request.Let me know which option you’d prefer (or suggest another), and I’ll execute the corresponding analysis.

USAR’s Rally: A Strategic Inflection Point in Rare Earth Supply Chains
USA Rare Earth’s 17.26% intraday surge is more than a stock move—it’s a signal of the company’s growing influence in the global rare earth supply chain. The LCM-Arnold partnership, combined with the Stillwater plant’s Q1 2026 commissioning, positions USAR as a critical player in the U.S. and European push for ex-China rare earth security. Technicals suggest the rally has legs, with RSI in oversold territory and MACD divergence hinting at further upside. Sector leader MP Materials (MP) gained 2.64%, but USAR’s strategic alignment with defense and industrial demand makes it a standout. Watch for a breakout above $16.62 (52-week high) and a test of $18.38 (Bollinger upper band). Investors should also monitor the 2027 DFARS ban’s impact on sector dynamics, as USAR’s Stillwater plant could become a linchpin in the U.S. rare earth renaissance.