A NEW TERROR SELL

Traders fear Fed

This economy might be too much of a good thing.

Traders were in sell mode Thursday on worries that a recent string of strong economic data will push the Federal Reserve to raise rates more aggressively to prevent the US economy from overheating.

The Dow Jones industrial average — which hit two consecutive all-time highs earlier this week on optimism about trade — fell more than 356.78 points in afternoon trades before paring losses to end down 200.91 points, at 26,627.48.

All eyes will be on the Labor Department Friday morning as it is expected to report that 180,000 jobs were added to the economy in September.

Any report that wildly exceeds projections could put a pause on the market’s historic nine-year bull-run as investors fear a more aggressive Fed.

“A blowout report would have an adverse effect on the market,” Mona Mahajan, US investment strategist at Allianz Global Investors, told The Post.

“Themarket takes that as the Fed goes full-steam ahead,” Mahajan said.

Some of those fears were present in Thursday’s trading as the yield on the 10-year Treasury note rose to just above 3.2 percent — its highest level in seven years. Bond yields move inversely to price.

The broader S&P 500 and tech-weighted Nasdaq joined in on Thursday’s sell-off, falling 0.8 percent and 1.8 percent, respectively.

“Traders are positioning themselves ahead of [Friday’s] numbers,” Peter Cardillo, chief market economist at Spartan Capital Securities, told The Post.

Although analysts are expecting the Labor Department to announce the increase of 180,000 positions, a report released Wednesday by ADP and Moody’s Analytics showed 230,000 jobs added — hinting that Friday’s figures could be similarly strong.

While a robust jobs report bodes well for households, a report that is too strong — and a Fed overreaction to it — could eventually pinch wallets.

“As rates start to move up, you notice what happens to the real economy,” Mahajan said, referring to increases in interest rates on mortgages, cars and credit cards.

“This is all about rising yields. There’s been a slew of Fed speakers [this week] and they’re all singing the same tune,” Cardillo said.

On Wednesday, Fed Chair Jerome Powell stoked Wall Street worries when he said rates were “a long way from neutral” — hinting more hikes were coming to prevent the economy from overheating.