FTC and USDA Launch Agricultural Equipment Inquiry, Sending Caterpillar Stock Down Nearly 6%

Caterpillar shares fell 5.75% on Wednesday, October 7, making it the worst performer in the S&P 500 and the biggest drag on the Dow Jones Industrial Average, after the Federal Trade Commission and the U.S. Department of Agriculture jointly announced a broad inquiry into the agricultural equipment industry. The two agencies said they were investigating whether equipment manufacturers and distributors are using market power to unfairly harm farmers, citing a growing number of complaints about barriers to buying machinery and accessing repair services.

The selloff extended beyond Caterpillar. Deere and Company fell 5.0%, CNH Industrial dropped 5.7%, and AGCO Corporation lost 5.9% on the same regulatory news. Caterpillar's losses alone shaved more than 200 points off the Dow, which ended the session down roughly 500 points, or about 0.7%, while the S&P 500 slid 0.22% and the Nasdaq fell 0.5%.

The broader market decline reflected additional pressure from rising Treasury yields and investor caution ahead of the Federal Reserve's September meeting minutes, which were expected to reveal a wider internal debate among policymakers than the unanimous vote suggested. Goldman Sachs was also among the Dow names in the red on the year by session's end, adding to the index's losses alongside Caterpillar. A Seeking Alpha analyst issued a downgrade on CAT shares during the session, compounding negative sentiment around the stock.