Caterpillar investors fearful as US-China trade war drives up costs

Shares in heavy-duty equipment maker fall despite better-than-expected profits

Caterpillar left investors concerned on Tuesday after the heavy-duty equipment maker warned that the US's trade war with China was driving up the cost of its raw materials and dampening the outlook.

Shares in the US firm, considered a bellwether for the manufacturing sector, fell more than 7% after it failed to raise its 2018 earnings forecast, prompting fears that a slowdown may be ahead.