Investors were already edgy before President Trump stunned Washington with a decision to impose stiff tariffs on foreign steel. The U.S. employment report for February could add to frayed nerves.

There’s not much bad to say about the labor market, mind you. The 4.1% unemployment rate is the lowest in 17 years, for instance, and the number of people getting laid off each week is at a nearly 50-year bottom. These are the hallmarks of the strongest U.S. economy in years.

So what’s bugging Wall Street?

Investors fret that such a tight labor market will force companies to increase wages rapidly, contributing to higher inflation. The initial panic broke out a month ago when the government said the yearly rate of growth in hourly pay soared in January to an eight-and-a-half year high of 2.9%. Stocks soon tanked.

Rising inflation would push the Federal Reserve to raise interest rates aggressively and make it more costly for households and businesses to spend and invest. Not only do higher rates make stocks less attractive to buy, they can slow economic growth.

The threat of a trade war over steel underscores worries about inflation.

The White House is aiming to protect U.S. producers and workers, but a big increase in tariffs raises costs for other U.S. companies such as automakers and oil drillers that use a lot of steel. They’ll try to pass on the higher cost of steel to customers.

The inward turn by the U.S. could also cause foreigners to turn away, causing the eroding value of the dollar to decline even further. That would raise the cost of imports — another form of inflation.

Read:This pro-tariff adviser has the ear of Trump on trade

“It is still too early to tell what the ultimate outcome will be, but the path the president’s tariff policy has put us on is a high-stakes gamble that puts the near-term Goldilocks economic outlook in serious jeopardy,” said Scott Anderson, chief economist of Bank of the West.

“In the end, it could force the Federal Reserve into overtightening monetary policy to head off a spike in inflation, which has been a catalyst for past U.S. recessions,” he added.

Such a day is still far off and the White House could back away from the precipice.

Read:Trump steel tariffs to hit these 8 countries the hardest — and China isn’t one of them

After investors gauge the reaction of other countries to the Trump steel tariffs, the February employment report will take center stage.

Set aside the headline jobs number. It’s all about wages and inflation now. Worker pay is on the rise, but the big gain in January may have been exaggerated by seasonal oddities that will fade in February.

“We suspect that the severe winter weather provided an artificial boost to average hourly earnings in January, given that the most weather-sensitive industries tend to be among the lowest paid,” economists at Capital Economics wrote.

If that’s the case, the yearly increase in wages could slip to 2.7% and give Wall Street a breather. But all bets are off if number tops 3% — another Wall Street selloff could be in the cards.

The last time wages rose at a 3% yearly pace was in 2006 and 2007.