The world on the cusp of a trade war has spooked investors, and few companies are feeling the fright more than Caterpillar Inc.
Shares of the Deerfield, Ill.-based company, which is expected to post record profit this year and the best sales since 2014, are headed for a sixth straight daily decline and the biggest monthly loss since 2016. The stock has been the worst performer on the Dow Jones Industrial Average in the past five days.
The slide for Caterpillar, a bellwether for American industry, shows how trade frictions are upending assumptions for an improving global economy. Markets have been rattled this week as China vowed to retaliate “forcefully” after President Donald Trump threatened to slap tariffs on an additional $200 billion of imports from the Asian nation. Caterpillar said as recently as January, after boosting its 2018 forecast, that it didn’t expect the Trump administration’s policies to ignite a trade war.
“The market is selling the big trade-related plays, and the exporters in particular,” Matt Arnold, an analyst at Edward Jones & Co. in St. Louis, said in a telephone interview.
The six-day decline in Caterpillar’s shares would mark the worst slump since February 2017.
Caterpillar was the best-performing stock in the Dow Jones gauge over the past two calendar years. In May, the maker of iconic yellow bulldozers and excavators posted its biggest monthly gain since December.
A Caterpillar spokeswoman didn’t respond to a request for comment on the share moves.
Caterpillar’s machines sales for May rose 24% from a year earlier on a three-month rolling-average basis, according to a report last week.