Editor
Shares of Cleveland-Cliffs absolutely rocketed this morning, vaulting over 10.5% after the integrated steel producer signaled it was weighing a bold new venture: getting into the rare earths mining business. It was an unexpected, yet savvy, pivot that overshadowed an already impressive earnings report, proving once again that in this market, future-looking strategy trumps past performance.
Geopolitics Fuels the Rare Earths Rush
The action in Cleveland-Cliffs, however, was part of a broader, politically charged surge in the rare earths sector.
The whole group moved sharply higher following reports from Bloomberg News that Australia’s Prime Minister is set to make a significant offer to the U.S. President: leveraging the nation’s vast mineral resources to help counter China’s recent move to curb exports of the critical materials to America. For Washington, a secure, non-Chinese supply chain for these elements—essential for everything from fighter jets to smartphones—is a matter of national security, not just commerce.
This geopolitical tit-for-tat saw smaller, more focused players soar. Shares of United States Antimony jumped by nearly 15%, while Critical Metals and USA Rare Earth climbed 9% and 6%, respectively. The implication is clear: the market smells a major new strategic initiative unfolding.
“This isn’t about supply and demand in the traditional sense,” noted Sarah Jenkins, a senior commodities strategist at Geopolitical Insights Group. “It’s about de-risking the Western supply chain. If Australia and the U.S. formalize this, the premium on non-Chinese rare earths assets becomes immense. Cliffs, with its existing mining infrastructure, could become a domestic champion almost overnight.”
Cliffs Beats the Street, Eyes Cost Cuts
Even without the rare earths buzz, Cliffs delivered a sturdy quarter. The company posted adjusted EBITDA of million, comfortably ahead of the FactSet consensus estimate of million. Crucially, management also tightened its purse strings, now forecasting capital expenditures of only about million for the year, a significant reduction from the prior forecast of million. Less cash out the door, more cash on the balance sheet—investors like that arithmetic, particularly heading into a period of potential economic uncertainty.
Meanwhile, the energy sector enjoyed its own momentum, with Liberty Energy shares leaping 5.6%, building on a massive 28%+ rally seen late last week. Despite the energy services company missing FactSet’s revenue expectations for the third quarter, investors focused squarely on management’s surprisingly upbeat sales commentary. Sometimes, a confident outlook is all it takes to shift sentiment.
Healthcare M&A Heats Up
Elsewhere, deal-making was the flavor of the day in healthcare, driving several stocks higher.
Hologic, the medical imaging giant, rose 4.5% on reports that private equity behemoths Blackstone and TPG were nearing a takeover agreement valued at more than billion. Similarly, the medical device maker Cooper Companies surged 4.2% after Reuters, citing people familiar with the matter, reported that activist fund Jana Partners has quietly amassed a stake. A whisper of private equity or activist involvement often acts as a fast-pass for stock prices.
In the tech space, chipmaker AMD ticked up nearly 2% after Bank of America not only maintained its “Buy” rating but aggressively raised its price target from to a striking per share. That’s a serious vote of confidence.
Finance Sector Shrugs Off Scare
The financial sector, specifically regional banks, continued its slow but steady recovery from a recent scare tied to potential bad loans. While not a dramatic surge, the group ticked higher, suggesting last week’s anxieties may be receding. Zions Bancorp and Western Alliance gained 0.8% and 0.4%, respectively, while the sector benchmark, the SPDR S&P Regional Banking ETF (KRE), advanced 0.6%.
Finally, investor confidence was boosted in several key names. Brokerage platform Robinhood rose 3% after regulatory filings showed several large investors had raised their stakes, and Ally Financial climbed 2% following a key upgrade from TD Cowen to “Buy” from “Hold,” with the analyst citing Ally’s improving credit and margin strength.
The Takeaway
Today’s trading wasn’t just about single-stock news; it was a clear signal that geopolitics and private capital are becoming the dominant drivers of market action. The focus on securing rare earths supply and the continued willingness of private equity to execute multi-billion dollar deals shows that underneath the macro-jitters, major strategic capital deployment is proceeding full steam ahead.
As one trading veteran put it, “The market is bifurcating. You have the companies that are vulnerable to the economic cycle, and then you have the strategic assets, the ones that solve a political problem or are ripe for an M&A clean-up. Those are the ones commanding a premium now. They’re basically insulated.”
