Caterpillar, the Dow’s best stock of 2026, is unraveling — and an earnings beat couldn’t stop it

Wall Street is still dumping stocks tied to the AI build-out, and an earnings beat offers no protection. Caterpillar (CAT) topped estimates and is sinking anyway.

The heavy-equipment maker, which sells power-generation gear to data centers, posted third quarter adjusted profit above forecasts and a record backlog of about $78 billion. But tariff refunds helped the profit number, revenue was roughly in line, and the company guided to only “moderate” sales growth in the fourth quarter.

That wasn’t enough for a stock priced for more. Caterpillar is on track for its worst day since April 2025, when tariff fears battered markets, and its lowest close since January. At its lows before the opening bell, it was down more than 12%, which would have been its steepest one-day drop since March 2020, two weeks before stocks hit their pandemic lows.

Candlestick chart of Caterpillar's stock price in 2026, with dashed lines marking resistance near $1,065, $930, and $780 and support near $665 and $625. The stock peaked above $1,060 in late June and has fallen to about $629.
Caterpillar is approaching potential support near $625 after slicing through its February and March lows · Yahoo Finance AlphaSpace

The fall is steep, a mirror of its ascent. Caterpillar was the best-performing stock in the Dow (^DJI) for about half of this year, according to Yahoo Finance calculations, and finished June up 86%, far ahead of any other member.

Line chart of 2026 returns for Caterpillar, Chevron, and Cisco. Caterpillar peaked at an 86% gain on June 30 and has fallen to about 15%, while Chevron and Cisco are up about 52% and 43%.
Yahoo Finance

It hasn’t held the top spot since early October. Thursday’s drop leaves the stock nearly 40% below its June record and its 2026 gain in the middle of the pack, well behind new leader Chevron (CVX).

The selloff has erased about $190 billion in market value from Caterpillar’s peak.

Candlestick chart of Caterpillar's stock price in 2026, with dashed lines marking resistance near $1,065, $930, and $780 and support near $665 and $625. The stock peaked above $1,060 in late June and has since fallen sharply.
Caterpillar is approaching potential support near $625 after slicing through its February and March lows · Bloomberg, Yahoo Finance

Some investors were already heading for the exits before the report. Todd Sohn, managing director and chief ETF strategist at Baird Strategas, found that investors have been pulling cash from funds that hold economically sensitive stocks like Caterpillar and moving it into safer areas such as healthcare and utilities.

That kind of retreat is rare with the S&P 500 (^GSPC) so close to its record, Sohn wrote in a Tuesday note, and it means expectations for those stocks are already low. “It’s a low bar for cyclical areas to bounce back,” he wrote.

Thursday’s drop has already carried Caterpillar through its February and March lows near $665, and the stock is now approaching potential support around $625, where buyers stepped in back in January. If that gives way, the next floor sits near $540, a level that would erase the stock’s entire 2026 gain.

Internal AI tools helped analyze interview transcripts, research, and draft this post. Humans reviewed, edited, and fact-checked this post before publication.

Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.

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