Caterpillar's and Eaton's results cast doubt on the performance of the industrial sector, one of the hottest trades this year. Shares of Caterpillar and Eaton fell on Tuesday after posting quarterly results that disappointed investors as President Donald Trump's tariffs start to bite, casting doubt on an industrial sector that was one of Wall Street's hottest trades this year. Caterpillar was down more than 1% after its profit took a big hit from Trump's tariffs. Eaton fell about 4% after providing third-quarter earnings guidance of $3.01 to $3.07 per share, missing Wall Street expectations of $3.09 per share. Caterpillar's operating profit fell 18% to $2.86 billion, down from $3.48 billion in the same period last year. Its profit took a hit due to "unfavorable manufacturing costs" that "largely reflected the impact of higher tariffs," according to the company's earnings release. Its construction business saw profit fall 29% compared to the year-ago period due to unfavorable prices and higher tariffs. Its resources segment that serves the mining and quarry industries saw profits drop 25% due to higher manufacturing costs associated with tariffs. The Industrial Select Sector SPDR Fund is up more than 14% this year, only behind the utilities sector which has gained more than 15%. But Caterpillar's and Eaton's results indicate that the industrial sector could face challenges this year due to Trump's tariffs. TransDigm , another big member of the industrial sector, was down 7% in early trading after the maker of aerospace parts cut its annual outlook.