Keeping up his tough talk from his New Jersey golf resort where he is on a working vacation, Trump warned Kim Jong Un's government to "get their act together" or face extraordinary trouble, and suggested his earlier threat to unleash "fire and fury" on North Korea was too mild.
Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programs as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.
The Dow Jones industrial average lost 50 points, or 0.2 percent, to 22,032.
The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a vehicle hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%.
Stocks plunge amid growing North Korean-US tensions, gold continues rise
The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up 1.17 points at 12.12 points, its highest level in a month.
Money is jumping into safe-havens like Gold and the Japanese Yen, while the Korean Won has fallen to its lowest level in a month- after extending its losses to around 2% for the week.
U.S. stocks have risen week after week this year - with the S&P up more than 9 percent - in extremely low volatility, as strong corporate earnings and an improving global economy offset disappointment that U.S. President Donald Trump's promises to lower corporate taxes and implement a massive infrastructure spending have so far failed to see the light of day.
USA stock futures ESc1 were marginally softer on Friday.
"More likely than anything else, the price action was a function of an overextended USA equity market that has been in need for a healthy correction off record highs", LMAX Exchange analysts said in a morning note.More news: Amber Alert issued for 4-year-old boy from Jupiter
Australian shares were down 1.3 per cent, set for a weekly loss of 0.6 per cent and Chinese and Hong Kong bluechips lost 1.6 per cent and 1.9 per cent respectively.
CURRENCIES: The dollar slipped to 109.98 yen from 110.06 late Wednesday in Asia.
Shaun Osborn from Scotiabank said, "The yen is the big story really".
United Kingdom housebuilders Persimmon, Taylor Wimpey and Barratt Development fell 2.8pc to 3pc after data showed house prices grew at their weakest pace in over four years last month.
Nasdaq 100 e-minis were down 40.25 points, or 0.68 percent, on volume of 29,918 contracts. Humana rose $4.74, or 1.9 percent, to $254.96.More news: Watch out Dunphys: The Beckhams take over the Modern Family set
"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions", said Viraj Patel, an FX strategist at ING in London. The Korea tensions though have seen both USA and European markets this week push back expectations of when the Fed and ECB might hike interest rates. The S&P 500 gained 6 points, or 0.2%, to 2,444, supported by gains in consumer-discretionary, technology and health-care sectors. The stock fell $169 to $1,879.98.
The 30-year bond last rose 5/32 in price to yield 2.8107 percent, from 2.818 percent late on Wednesday.
Disappointing U.S. inflation and jobs data have not helped the dollar.
After the bell, Twenty-First Century Fox shares were up 0.7 percent following the release of its results.More news: Pro-Dominion Diamond Corp Institutional Investors Sentiment Runs High in 2016 Q4
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