The world’s most widely followed stock-market benchmark slid into a correction on Thursday, a drop that underscores how the two-year-long bull market is running out of steam in the early days of the Trump administration.

The move stems from investors’ growing pessimism about the whipsawing policy pronouncements from Washington over the past few weeks. On-again, off-again tariffs and mass layoffs of federal workers have fomented unease on Wall Street.

On Thursday, the S&P 500 fell 1.4 percent. After weeks of selling, the index is now down 10.1 percent from a peak that was reached less than one month ago and is in a correction — a Wall Street term for when an index falls 10 percent or more from its peak, and a line in the sand for investors worried about a sell-off gathering steam.

Other major indexes, including the Russell 2000 and the tech-heavy Nasdaq Composite, had already fallen into correction before Thursday.

The deeper worry among investors is that uncertainty around the effects of Mr. Trump’s policies is causing consumers to spend less and discouraging businesses from investing. That reticence could, in turn, drive the economy into a downturn, forcing investors to re-evaluate company valuations.

“I think what markets are telling us is that they are very concerned about the potential for a recession,” said Kristina Hooper, chief global market strategist at Invesco. “That is certainly not what markets expected going into 2025.”