Global stock markets ended their worst week in months amid rising tensions between the USA and North Korea, though US stock indexes steadied on Friday to close up slightly.
Most Asian currencies stumbled, with the Korean won on pace for its biggest fall in almost eight weeks as North Korea warned it is "carefully examining" plans for a missile strike on the US Pacific territory of Guam.
The Dow Jones Industrial Average closed down 204.69 points, or 0.93 percent, at 21,844.01, the S&P 500 lost 35.81 points, or 1.45 percent, to end the session at 2,438.21 and the Nasdaq Composite fell 135.46 points, or 2.13 percent, to 6,216.87.
The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors a reason to pocket profit in the sectors such as technology that have been the biggest gainers in recent months, analysts said.
Stocks ended more than one percent down in Seoul while the won slumped to a three-week low against the dollar as the USA president and South Korea´s volatile neighbour dramatically ramped up their war of words.
The sell off in stocks and flight to safety gathered pace in early European trade as the already cool relationship between the United States and North Korea turned icy following hard-nosed rhetoric from both nations.
Markets in Asia appeared to stabilize in Thursday trade, although geopolitical tensions involving North Korea continued to weigh on equities. The Shanghai Composite Index lost 0.2 percent to 3,273.71 and Hong Kong's Hang Seng was off 0.2 percent at 27,803.55.
Trump warns NKorea that U.S. is 'locked and loaded'
An escalating exchange of provocative rhetoric between the United States and North Korea is alarming global leaders. They are expected to arrive in the designated sites early Saturday.
Investors instead turned to safe-haven assets such as gold, pushing it to a two-month high, and the Japanese yen rose.
The outlier was Australia's S&P/ASX 200 Index resisted the region-wide downward trend to add +0.4%.
Until this week, the equity market had managed to shake off negative news, including previous saber-rattling over North Korea and failures in Washington to pass high-profile bills, such as repealing and replacing Obamacare. The grim mood also spread to eurozone markets, with the French CAC 40 falling 0.9%.
Innogy shares have moved to the downside after German utility maintained the outlook on the current year's business performance after reporting a drop in first-half net income to 817 million euros from 1.08 billion euros last year.
In economic news, German consumer inflation grew an annual 1.7% in July, slightly faster than the 1.6% increase registered in June, final data from Destatis showed.
A Labour Department report showed its producer price index posted a surprise drop in July, down 0.1 percent for the largest slide in nearly a year.
While the Consumer Price Index increased +1.4% vs. a forecast of +1.5% - well below the government ceiling of +3%.
Mounting tensions lifted USA defense stocks.