Caterpillar's stock is sinking. Here's what that means for the Dow.

By Tomi Kilgore

The business engaged in the data-center build-out is doing well, but broader construction industries disappointed

Caterpillar's data-center business is fine, but other areas disappointed. The stock was heading for its biggest loss in years.

Shares of Caterpillar were suffering Thursday, turning the Dow Jones Industrial Average negative, as investors expressed disappointment over a slight miss in third-quarter sales.

The miss wasn't the fault of the company's power and energy business, which has been benefiting from the data center build-out, as sales growth accelerated and prices increased. But sales from the construction-industries business came up short.

The stock's (CAT) hot streak started in 2025, as its exposure to data centers made it part of the artificial-intelligence trade, and continued through the first half of this year. But it has been declining over the past several months amid worries that the AI build-out was slowing. Through Wednesday, the stock had tumbled 33%. It closed at a record high of $1,064.90 on June 30.

In morning trading Thursday, the stock pared some losses, but was still down 7.3% toward a nine-month low, and was on track for the biggest single-session percentage decline since it fell 8.6% on April 3, 2025. The price decline of $52.16 would be its fifth-biggest ever.

The Dow DJIA is a price-weighted index - Caterpillar's stock is the index's second-highest-priced component - so the decline would take about 310 points off the price of the Dow, which was down 152 points, or 0.3%.

The company reported third-quarter sales of $20.68 billion, up 17.3% from a year ago but below the consensus analyst expectation of $20.76 billion, according to FactSet. That snapped a five-quarter streak of top-line beats.

Power and energy sales rose 17.7% to $8.78 billion, above the FactSet consensus of $8.22 billion, due to higher sales volume and increased pricing. In the previous quarter, sales had increased 17.1%.

Construction-industries sales rose 18.1% to $7.98 billion, but missed the consensus expectation of $8.12 billion, FactSet noted.

On the bottom line, Caterpillar performed better than expected, as profits jumped 42.9% to $3.29 billion, and adjusted earnings per share of $7.20 topped expectations of $7.06.

Caterpillar's stock has still gained 15.4% in 2026, while the Dow has advanced 8.9%.

-Tomi Kilgore

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10-29-26 1112ET