USA Rare Earth Inc. (USAR) plummeted 5.60% intraday, as the stock faced selling pressure amid a broad-based retreat in the rare earth sector.

The decline is attributed to collective profit-taking across the rare earth space following a strong rally. The stock had previously surged on dual tailwinds, including the U.S. Department of Energy awarding up to $19.3 million in funding to support a rare earth element separation pilot project, and the Quad alliance (U.S., Japan, India, Australia) announcing plans to mobilize $20 billion in public and private capital to strengthen critical mineral supply chains.

Sector peers such as MP Materials and Critical Metals also declined, reflecting widespread selling in the diversified metals and mining sector. Investors locked in profits amid elevated valuations after significant cumulative gains since mid-May, leading to the pullback.