Industrial Stocks Flash Technical Warnings After Swift 10% Slide

The rapid slide in US industrial stocks over the past month is ringing some alarm bells on Wall Street. The S&P 500 Industrials Index has tumbled nearly 10% from its mid-August record high, pushing it below a key momentum indicator for the first time since President Donald Trump’s trade war hammered the sector in early 2025.

The index — which includes manufacturing behemoths such as Caterpillar Inc., General Electric Co., RTX Corp. and Deere & Co. — has closed below its 200-day moving average every trading day since Sept. 14. The metric is closely followed by traders as a long-term momentum indicator. A State Street exchange traded fund tracking the sector is on pace for its second-biggest monthly outflow since April 2025 — topped only by this March, after the beginning of the war in Iran.

That conflict has begun to bite again in recent weeks. Oil prices and bond yields have spiked, threatening to slow the economic activity that drives the sector’s revenue. And diesel prices have hit record highs, which can drive up the companies’ fuel costs, squeeze margins and weaken demand from its customers. That’s sparked declines of 10% or more for stocks including Fed Ex Corp., GE and Stanley Black & Decker Inc. The sector had gained on anticipation that it would benefit from the rapid construction of data centers for AI companies. But those expectations have been tempered in recent months, with both GE Vernova Inc. and Caterpillar taking a hit as investors reevaluate the thesis. Deere has been among the index’s few winners, rising 17% during the broader index’s pullback as farm commodities rallied.

LPL Financial strategist Adam Turnquist said he is watching the index level of 1,415 points because falling below that threshold “could open the door” to downside toward 1,320 points, where the index has previously found support. It closed at about 1,440 on Wednesday. Still, analysts expect robust earnings growth and the index looks oversold, he said.

“This degree of selling pressure points to washed-out conditions that have historically preceded at least a short-term relief rally,” Turnquist wrote in a note.