The Japanese yen hit an eight-week high against the USA dollar, and US -traded Nikkei stock futures dropped 2 percent to their lowest since mid May.
"There's not a fundamental reason why what we're seeing out of North Korea right now should affect stock market prices, but it's being used as the reason to sell off right now because we've been looking for it for so long", Schiegoleit said.
And when the S&P 500 breaks a streak of 50+ trading days without a 1%+ up move, the index actually averages a decline over the next month and a gain of just 0.86% over the next three months. The Shanghai Composite Index lost 0.2 percent to 3,275.57 and Hong Kong's Hang Seng was off 0.3 percent at 27,757.09.
Rising geopolitical tensions were heightened further when U.S. President Donald Trump warned Pyongyang it should be "very, very nervous" if it even thinks about attacking the United States or its allies, after Pyongyang said it was making plans to fire missiles over Japan to land near the U.S. Pacific territory of Guam. Japan and South Korea vowed a strong reaction if the North were to go through with the plan.
Data from the U.S. Commodity Futures Trading Commission released last week showed that currency speculators still held a large net short position in the yen during the week ended August 1, although somewhat smaller than the levels seen a couple of weeks earlier, when their bearish bets against the yen grew to the largest since January 2014.
The dollar index .DXY fell 0.1 percent, with the euro EUR= up 0.01 percent to $1.175. After breaking through 10,000 for the first time last Friday, the index has undergone a small correction with falls of 2.47% so far this week.
Travel companies Priceline.com and TripAdvisor also weighed on markets, with shares falling more than 7%. MetLife fell 75 cents, or 1.6 percent, to $47.56, while Charles Schwab slid 69 cents, or 1.6 percent, to $41.33.
Outside of geopolitical concerns, disappointing company earnings and outlooks put traders in a selling mood. Watch maker Fossil Group plunged 25 percent after reporting a weak quarter. Viacom slid 93 cents, or 3 percent, to $29.84.
BONDS: Bond prices rose.
Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21%.
OIL: Benchmark U.S. crude gained 13 cents to $49.69 a barrel on the New York Mercantile Exchange.
Oil prices edged higher after a report showed US refineries processed record amounts of crude in the latest week, eating into inventories, although a surprise jump in gasoline stockpiles limited gains.
"The dollar is a safe haven, just as much as the Swiss franc and the yen". The euro fell to $1.1735 from $1.1752.
Nevertheless, APRN is down 12.7% in pre-market trading, headed for a record low.
The Dow Jones industrial average lost 71 points, or 0.3 percent, to 22,013. The FTSE 100 index of leading British shares declined 0.6 percent.
More than 430 stocks from all US exchanges hit their lowest levels in 52 weeks or more on Thursday, the most for any session since mid-November right after Trump was elected.