WASHINGTON — Suddenly, the world’s financial markets are gripped by fear that an escalating trade rift between the United States and China — the two mightiest economies — could inflict far-reaching pain.

The Dow Jones industrial average lost a combined nearly 1,150 points Thursday and Friday after President Donald Trump set his administration on a path to restrict Chinese investment in the United States and impose tariffs on up to $60 billion of Chinese products.

The sanctions Trump unveiled Thursday are meant to punish Beijing for pilfering technology from American companies or for forcing them to hand over technology in exchange for access to China’s market. The announcement followed an investigation by the Office of the U.S. Trade Representative into the tactics China has deployed to try to overtake American technological supremacy.