By Lewis Krauskopf

NEW YORK- Economic fears are roiling Wall Street, as worries grow that the Federal Reserve may have left interest rates elevated for too long, allowing them to hurt US growth.

Alarming economic data in recent days have deepened those concerns. US job growth slowed more than expected in July, a Friday report showed, while the unemployment rate increased to 4.3 percent , heightening fears that a deteriorating labor market could make the economy vulnerable to a recession.

The jobs report exacerbated a selloff in stocks that began on Thursday, when data showing weakness in the labor market and manufacturing sector pushed investors to dump everything from chip stocks to industrials while piling into defensive plays.

Richly valued tech stocks tumbled further on Friday, extending losses in the Nasdaq Composite to more than 10 percent from a record closing high reached in July. The benchmark S&P 500 index has slid 5.7 percent from its July peak.

“This is what a growth scare looks like,” said Wasif Latif, president and chief investment officer at Sarmaya Partners. “The market is now realizing that the economy is indeed slowing.”

For months, investors had been heartened by cooling inflation and gradually slowing employment, believing they bolstered the case for the Fed to begin cutting interest rates.

That optimism drove big gains in stocks: the S&P 500 remains up 12 percent this year, despite recent losses; the Nasdaq has gained nearly 12 percent .

Now that a September rate cut has come into view following a Fed meeting this week, investors are fretting that elevated borrowing costs may already be hurting economic growth. Corporate earnings results, which saw disappointments from companies such as Amazon, Alphabet and Intel, are adding to their concerns.

“We’re witnessing the fallout from the curse of high expectations,” said James St. Aubin, chief investment officer at Ocean Park Asset Management. “So much had been invested around the scenario of a soft landing, that anything that even suggests something different is difficult.”