Deere's stock price dropped nearly $8 on Wednesday, or more than 4%, after the company said it expects trade tensions will continue to hurt sales and earnings in 2020. The shares, which are still up 15% in 2019, closed the day at just over $169. The company's total market value slid nearly $3 billion, to $55 billion.

Executives at the farm and construction equipment manufacturing giant said its net income could drop as much as 17% next year. Deere's CEO John May in a statement said "lingering trade tensions" were, in large part, driving the expected drop.

The chief executive also said that difficult weather conditions and a poor harvest in 2019 would likely hurt the company's farm equipment sales. Earlier this month, Deere laid off 160 employees in Illinois and Iowa amid fading demand for its farming equipment.

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In another worrisome sign for the financial health of farmers, Deere said that earnings at its lending division fell by 48% in its fiscal 2019, which ended October 31. The company said the drop was due to an expectation that loan defaults by farmers will rise.

Many farmers have "become cautious about making major investments in new equipment," said May. The diminished outlook came as Deere reported fiscal 2019 earnings that were better than expected. Sales rose 5%. Deere cut production in September. At the time, it also cited trade uncertainty as the main reason for a recent drop in orders.

For next year, Deere projected its agricultural equipment sales would fall as much 10%. Construction equipment sales are expected to decline as much as 15% next year, the company said.

The pessimistic outlook from Deere comes as farmers await the signing of a preliminary trade deal between the U.S. and China.

President Donald Trump announced in October that the two countries were agreeing to a "phase one" trade deal that would include China buying more crops from the U.S. But that deal has yet to happen. Earlier this week, China's official news agency said the two sides had reached a consensus, but that more negotiations had to occur before a deal could be reached.

Then on Thursday, China condemned Mr. Trump and the U.S. Congress for his signing two bills that supported the ongoing democratic protests in Hong Kong. Some said the move could make striking a trade deal with China more difficult.