A risk-on reversal lit up the domestic drone-supply complex — rare-earth, airframe and interceptor names ran 5–9% as USA Rare Earth proved out recycled heavy-rare-earth oxides and Kratos banked a $400M hypersonics award.

Tuesday reversed Monday's Strait-of-Hormuz risk-off almost cleanly: June CPI cooled to 3.5%, Fed rate-hike bets eased, and the S&P 500 rose 0.38% to 7,543.59 with the Nasdaq up 0.9% to 26,107.01. The drone basket ran harder than the tape, and it ran exactly where the supply chain is most contested. The leader was Unusual Machines (UMAC), up 8.5% to $18.68 — a domestic airframe-and-components name with no single fresh catalyst, riding momentum and the standing analyst targets (Needham $30, Roth $40) that have trailed it since June. The move is better read as a group bid than a company event: the closer a name sits to a Chinese-controlled input, the more it rallied on a day risk came back on.

The hard catalyst sat one line down. USA Rare Earth (USAR) rose 5.7% to $18.19 after announcing it had produced commercial-grade dysprosium oxide and neodymium-praseodymium oxide samples from recycled magnet material at its Wheat Ridge facility. That is the rare-earth-magnet chokepoint the whole vertical maps: dysprosium is the heavy rare earth China restricts hardest, and proving it out from a domestic recycling stream — not just a mine — is a genuine de-risking of the neo-magnet supply the airframes depend on. Kratos (KTOS) added 7.2% to $50.36 on roughly $400M of DoD funding for hypersonic flight vehicles and solid rocket motors, and the airframe layer followed: Ondas (ONDS) +5.7% to $7.36, Red Cat (RCAT) +4.9% to $8.79, MP Materials (MP) +2.6% to $50.79.

The only real red was structural, not operational. The nominal laggard was the Fundrise Innovation Fund (VCX), down 7.0% to $62.31 — a closed-end wrapper still trading at more than triple its ~$19 net asset value, whose Anduril and Anthropic look-through did not move; this was premium compression in a private-AI vehicle on a day public AI rallied, not a drone-fundamentals signal. Among operating names the worst was Qualcomm (QCOM), off 3.2% to $178.10 on chip-specific rotation. Notably, Mercury Systems (MRCY) rebounded 2.1% to $100.32, recovering part of Monday's 9% profit-taking at the processing-subsystem chokepoint.

The calendar turns hard this week. Today (July 15) brings the House floor vote on the FY27 NDAA (H.R. 8800) and the guided disclosure of Army–RTX Coyote multi-year framework terms — both directly price the interceptor and counter-UAS layer. Teledyne reports July 22 in its first print since the LASSO award, and RTX and Iridium both report July 28. The domestic-magnet read then lands July 30 with MP Materials' Q2, and the two hard rare-earth dates still loom in the fall — China's October 2025 export-control suspension expires November 10, the gallium/germanium/antimony ban November 27. Tuesday priced the reflation; the magnet supply chain still decides this vertical.