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The Dow Jones Industrial Average fell Wednesday after economic adviser

Gary Cohn’s

resignation from the White House led to renewed concerns over a possible trade war and its impact on global growth.

Some investors saw Mr. Cohn’s resignation as a sign that President

Donald Trump

was pushing forward with the steel and aluminum tariffs he announced last week and were worried that protectionist trade policies could spread. Mr. Trump will sign a proclamation to enact the tariffs this week, with “potential carveouts” for Mexico, Canada and possibly other countries, press secretary

Sarah Huckabee Sanders

said Wednesday.

Global trade disruptions could lead to ripple effects for a wide range of commodities and products, some investors fear, resulting in higher costs for companies and consumers and ultimately slower economic growth. The concerns about trade come after worries about higher interest rates sent the Dow industrials to their worst month in two years in February.

Gary Cohn, director of the National Economic Council, said late Tuesday he would resign.

Gary Cohn, director of the National Economic Council, said late Tuesday he would resign.


Photo:

Brendan Smialowski/Agence France-Presse/Getty Images

“We do think the aggregate risk to this more placid narrative has really gone up in recent months,” said Eric Freedman, chief investment officer for U.S. Bank Wealth Management. “Things like trade policy changes and the potential for a trade war—those are real issues that may alter the timeline of economic growth and stability.”

The Dow industrials closed down 82.76 points, or 0.3%, at 24801.36, after earlier shedding as much as 349 points. The S&P 500 edged down 1.32 points, or less than 0.1%, to 2726.80, and the Nasdaq Composite added 24.64 points, or 0.3%, to 7396.65.

Stocks rose to start the week after prominent members of the Republican party pushed back against the tariffs, fueling bets that a widespread trade war was unlikely.

A number of companies and other countries have also voiced concerns about the tariffs in recent days, with full details still yet to be announced and uncertainty surrounding negotiations over the North American Free Trade Agreement.

The European Union on Wednesday urged Mr. Trump to rethink his planned tariffs, threatening to strike back unless the White House reverses course.

“You will have a disruption in growth if you get to the point where everybody is saying, ‘We have no other option but to hit back,’” said Dec Mullarkey, a managing director on the investment research team at Sun Life Investment Management.

Shares of industrial firms that would be most affected by higher commodity costs were among the worst performers Wednesday. Heavy machinery maker Caterpillar fell $2.24, or 1.5%, to $151.51, weighing on the Dow.

Some U.S. bank stocks also fell as markets fretted over Mr. Cohn’s departure and its implications for trade, the economy and regulation. JPMorgan Chase fell 43 cents, or 0.4%, to 114.73, while

Citigroup

slipped 14 cents, or 0.2%, to 73.92.

Oil prices tumbled 2.3%, leading to declines in the energy sector after government data showed that crude stockpiles increased and U.S. production reached new heights last week. Those losses helped offset gains in the technology, health-care and real-estate sectors.

The yield on the benchmark 10-year U.S. Treasury note edged up to 2.883%, according to Tradeweb, from 2.877% Tuesday. Yields rise as prices fall.

Some investors said they expect the market to recover and the global economy to remain strong, as long as an all-out trade war is avoided.

“In general, it should be a good period [for markets], but it’s probably going to ping pong between these bouts of low volatility and great asset performance and short, sharp corrections that push people back on their heels when something crops up on the trade front” or elsewhere, said

Robert Tipp,

chief investment strategist at PGIM Fixed Income.

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Write to Riva Gold at riva.gold@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com