A U.S. stock-market rally that appeared unstoppable just six weeks ago is now at a crossroads, reflecting fears that Trump administration trade restrictions and signs of firming inflation could threaten the underpinnings of the strongest global economic expansion in years.

Investor confidence hadn't recovered from a tumultuous February when President Donald Trump pledged Thursday to impose tariffs on steel and aluminum imports. The Dow Jones Industrial Average (.DJI), which includes several big manufacturing, machinery and chemical companies that would suffer from higher metal prices, closed 0.3% lower on Friday after a 1.7% decline the day before.

While many analysts and traders were heartened by the Dow's rebound Friday afternoon following a sharp opening decline, some worry the administration's decision may signal the start of a broader protectionist trade policy that could eventually include other commodities and products.

Any sustained trade conflict could disrupt the synchronized global economic expansion that has been a main driver for the stock market and other risky investments, like commodities and emerging markets, over the past several months, portfolio managers said.

Trade and growth concerns inject new uncertainty at a time when stocks are coming off their worst month in more than two years. Investors are already grappling with the threat of an economy expanding so quickly that the Federal Reserve may have to hasten its pace of interest-rate hikes to tame inflation. Low interest rates have long been a justification for stocks' lofty valuations, and investors say higher rates will make equities less attractive as borrowing costs and Treasury yields rise.

Recent data have shown a pickup in consumer prices and worker wages, signaling to some that higher inflation is around the corner.

"The market was vulnerable already," said Bruce Bittles, chief investment strategist at Baird. "The problem with the rebound rally was that it never broke the downside momentum."

In addition to trade concerns that promise to linger into this week, investors will scrutinize the results of the Italian elections on Sunday to gauge risks to the Eurozone's third-largest economy. Fresh data Wednesday on the U.S. trade deficit will offer a view of the state of U.S. finances. The February U.S. jobs report, due Friday, could shed light on wage growth and inflation trends.

Demand for risky securities has waned in recent weeks, as inflation and then trade concerns percolated. The Dow hit its all-time high of 26,616.71 on Jan. 26 before suffering its first 10% decline, or correction, in nearly two years early last month. The Dow dropped 3% to 24,538.06 last week.

Despite the retreat, the Dow is still up 34% since its election day close in 2016. That fact offers comfort to bullish investors who believe the selling has been overdone, but suggests to some skeptics that the market could easily fall further.

Some investors think the fundamentals remain strong, pointing to another quarter of solid corporate earnings, fiscal stimulus from the new law that cut corporate tax rates to 21% from 35%, and inflation that remains tame despite heightened fears after the recent bump in wage growth.

Last month's CPI reading showed a 0.5% increase in prices for January, and overall prices were 2.1% higher over the last 12 months, above economists' expectations.

The price index for personal-consumption expenditures, the Fed's preferred inflation measure, advanced 1.7% in January from a year earlier, undershooting the central bank's 2% target for the 67th time in the last 69 months.

The Labor Department will release its next CPI reading on March 13.

"This is all noise," said Stephen Auth, chief investment officer, equities, at Federated Investors, referring to the trade-war talk and the selling that followed it. He thinks the prospects of a trade war are very small and that when the market realizes that, stocks will bounce back again.

Still, other governments were quick to attack the tariffs Mr. Trump announced last week. European officials raised the prospect that they would challenge the tariffs at the World Trade Organization and could impose their own tariffs. Canadian officials also said they would "take responsive measures" against the U.S.

Mr. Trump seemed to welcome a fight, tweeting on Friday that "trade wars are good" and suggesting the U.S. would "win big." Analysts and many investors disagreed. They said the economic repercussions of allies enacting similarly aggressive policies would ripple through the U.S. economy, affecting the prices of everything from cars to beverages.

"I believe these tariffs on their own will push inflation higher, and higher inflation is a threat to the valuations of more or less all financial assets today," Ben Inker, head of GMO's asset allocation team, wrote in a note last week.

Now, investors are anxiously awaiting details on the Trump administration's tariff plans, which could be announced as early as this week.

Mr. Trump plans to apply the steel and aluminum tariffs globally and won't exempt allies such as Canada and Europe, a senior White House official told The Wall Street Journal last week.

Many are also closely watching Washington's contentious talks with Canada and Mexico over the North American Free Trade Agreement for additional clues about how hard a line Mr. Trump will take on trade.

Many investors remain cautious. The introduction of tariffs "certainly doesn't want to make us increase our expectations for [gross domestic product] growth," said Leo Grohowski, chief investment officer of BNY Mellon Wealth Management.