USA Rare Earth Inc. (USAR) saw its stock price plunge 10.55% in pre-market trading on Friday, extending the previous day's losses amid escalating U.S.-China tensions over rare earth elements. The significant downturn reflects growing investor concerns about the geopolitical climate and its impact on the rare earth sector.

The pre-market plunge follows a turbulent trading session on Thursday, where USAR's stock had already dropped 5.40%. The continued decline can be attributed to the ongoing dispute between the United States and China regarding rare earth exports. Recent reports indicate that Chinese state media has rebutted U.S. calls for Beijing to reduce its control over rare earth exports, labeling new U.S. export restrictions as "a global supply-chain power grab."

Adding to the market uncertainty, China is set to implement new export restrictions on November 8, while the U.S. is threatening to reimpose significant tariffs on Chinese goods. This geopolitical standoff has caught the rare earth market in the crossfire, leading to increased volatility across the sector. As these tensions continue to unfold, investors in USA Rare Earth and other companies in the industry may face further uncertainty and market volatility in the coming days, potentially impacting stock performances and market valuations.