President Biden just dropped the hammer on Nippon Steel's $14.9 billion takeover of US Steel ( NYSE:X ), citing national security concerns. The decision, which followed a months-long review by CFIUS, effectively shuts the door on foreign ownership of one of America's largest steelmakers. Biden's statement was clear: US Steel stays American-owned, period. The stock market, however, wasn't as thrilled. Shares of US Steel nosedived 7.9% to around $30, pushing the company closer to its lowest level since September and extending its year-long slump to a brutal 34.5%.

For US Steel, this is a gut punch. The company was banking on Nippon's promised $3 billion infusion to modernize operations and avoid shuttering key mills. Now? They're back to square one, scrambling for options. Cleveland-Cliffs, an earlier bidder, might take another look, but with their recent acquisition spree, that's no guarantee. Meanwhile, short sellers are feasting, with options trading hitting triple the usual volume by midday. The most popular play? January $30 puts, signaling that traders aren't betting on a quick rebound.

And Nippon Steel? Their global expansion dreams just hit a brick wall. The Japanese steel giant was eyeing a jump from 65 to 85 million tonnes of annual output, inching toward a 100-million-tonne goal. Instead, they're left looking for Plan B while US-Japan relations take a hit. Biden's decision is a win for union bosses, but many workers saw the deal as a lifeline for their jobs, sparking frustration on the factory floor. Now, with US Steel in limbo, the spotlight shifts to what's next for this American iconand it's a story investors will want to watch closely.

This article first appeared on GuruFocus .