Shares of the company, often viewed as bellwether for the industrial economy, fell about 4% in premarket trading after it also flagged a tariff impact of $400 million to $500 million in the third quarter.

Caterpillar warned on Tuesday U.S. tariffs would pose significant challenges in the second half of the year and cost the construction equipment maker up to $1.5 billion in 2025.

Tariffs are having a bigger impact on Irving-based Caterpillar Inc.’s margins even as demand for the company’s iconic yellow diggers and bulldozers