At the close trading in NY, the Dow Jones Industrial Average was down 204.69 points, or 0.9%, to 21,844.01, its biggest one-day fall since May 17.
Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam. The S&P hasn't moved more than 0.5 percent in one day since July and has fallen more than 1 percent only twice this year.
Inflation has risen 1.7 percent over the past 12 months, suggesting that inflation pressures remain well under control.
"While it appears that Pyongyang's detailed strike plan against Guam has created a sour backdrop to trading, it's worth noting that US/North Korea tensions aren't having quite the same effect on the DAX and CAC", said Spreadex analyst Connor Campbell.
The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 percent to C$24.43, its largest drop since early August previous year.
The Federal Reserve has promised to raise interest rates at just a gradual pace to avoid disrupting the recovery or the markets.More news: Same manager, same tactics, better players - Guardiola lays out Man City blueprint
Ralph Lauren gained $10.38, or 13.3 percent, to $88.53, while peer-to-peer loan company LendingClub added 99 cents, or 18.1 percent, to $6.45.
Lam Research Corp. climbed $4.82, or 3.2 percent, to $154.26. The stock lost 78 cents to $3.93.
The strength on Wall Street is partly due to bargain hunting, with traders picking up stocks at reduced levels following the pullback seen over the past few sessions.
Bond prices were little changed.
In oil, Brent crude was dragged 0.5% lower at 52.46 United States dollars a barrel despite Opec forecasting increased demand for oil next year.
To that end, gold prices shot up to near $1,300 an ounce - their highest level in several months. The September copper contract was down two cents to US$2.91 a pound.More news: Advice from an eye doctor on viewing the eclipse safely
Losses in health care and consumer-focused companies pulled USA stocks broadly lower Tuesday, snapping a 10-day winning streak for the Dow Jones industrial average.
The dollar slipped to 109.04 yen from 109.26 late Thursday.
Nasdaq 100 e-minis were down 17 points, or 0.29 percent, on volume of 36,232 contracts.
Hong Kong shed more than one percent and Shanghai also closed lower, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening. On the Nasdaq, 1,462 issues rose and 1,227 fell.
The Dow fell more than 200 points, a almost 1% drop, and its biggest dip in three months. The Japanese markets were closed for a holiday.More news: Missile threat is great for tourism, Trump tells Guam
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