Markets Are Uneasy After a Week of Dizzying Policy Shifts

The U.S. stock market is headed for one of its worst weeks in many months, after a series of dizzying policy shifts on tariffs from the White House. A fresh jobs report on Friday will provide a crucial reading on the strength of the economy, which has become a growing worry for investors.

Futures on the S&P 500 pointed to a subdued start to trading when markets open. The benchmark index has already dropped 3.6 percent so far this week, its worst week since September. It is on course for its third consecutive week of losses, a sharp mood shift since the index hit a record high less than a month ago.

Since then, investors have become worried about the trajectory for economic growth, made worse by tariffs on imports from the country’s largest trading partners. Surveys also showing mounting concern among consumers.

Investors who had hoped that President Trump’s tariff threats were just a negotiating tactic were disappointed on Tuesday when 25 percent tariffs came into force on Mexico and Canada, and an additional 10 percent tariffs on China. Concessions were made on Thursday, suspending the tariffs on many goods from Canada and Mexico, but it failed to stoke a rally.

If the jobs data released on Friday shows a slower pace of hiring in February, it could exacerbate concerns over the economy.

“I think the markets are essentially taking President Trump a bit more seriously on tariffs,” said Jim Caron, chief investment officer of the portfolio solutions group at the Morgan Stanley Investment Institute. He said that despite the recent sell-off, major stock indexes remain close to record highs, and while worries over the economy are rising, the economy remains in good shape.

Much of the sell-off has been driven by big technology companies. Because of their size, even small changes in their stock prices can have a big effect on broad indexes. Since the S&P 500 peaked on Feb. 19, the index has fallen 6.6 percent. A separate measure that gives all of the stocks an equal weight in the index has fallen just 4.4 percent over the same period.

What isn’t clear is whether investors are selling because they see the tide turning for tech companies or because of broader concerns.

“In the last couple of weeks, and maybe for the next couple of weeks, we have gone through a very challenging news cycle,” Mr. Caron said. “We need to get through that and assess how much damage there is to markets.”