The CBOE Volatility Index, the most widely followed barometer of expected near-term US stock market volatility, hit its highest mark since November 8, when Trump was elected president.
Global benchmark Brent lost 0.7 percent to $51.53, after Thursday's 1.5 percent drop.
The US Consumer Price Index (CPI) edged up 0.1% last month after staying flat in June and falling by 0.1% in May.
"I think the market was looking for a reason to come off here", said Irwin Michael, portfolio manager at ABC Funds.
Trump's comments followed reports that North Korea had successfully produced a nuclear warhead that could be fitted inside its missiles.
Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 per cent. Spot gold reached a two-month high.
Investors will also be keeping an eye out on retail results as second-quarter earning season winds down.
Biotech companies Celgene and Amgen lost 3.8 percent and 2.6 percent, respectively. The company's stock dropped $4.15, or 3.88 per cent, to $102.83 US.
"Add it all up and stocks are vulnerable to a pullback or correction", Bittles said.
Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55 per cent, its biggest one-day loss since mid-December, to leave it down 2.5 per cent for the week.
The S&P's record close on August 7 likely helped fuel its latest sell-off. "That is the longest stretch in 20 years", Bruce Bittles, chief investment strategist at Baird, told The Post.
Falls were also seen on Wall Street, with the Dow Jones Industrial Average down 0.5% about 15 minutes into trading and the Nasdaq (Frankfurt: 813516 - news) tumbling by 0.6%. The index - which last week hit 22,000 for the first time - closed at 21,844. Away from the geopolitical drama, USA inflation data is due at 1330 GMT. Rival Advanced Micro Devices was also down 2.6 percent. It is still the best performing G10 currency so far this year with gains of more than 11 percent against the dollar.
Many markets have climbed to record or multi-year highs, leaving them vulnerable to a sell-off.
Oanda analyst Craig Erlam said: "Risk aversion is once again the name of the game.as geopolitical tensions mount and investors head for cover in the traditional safe havens". In Australia, the S&P/ASX 200 advanced 0.41%, with the index driven by broad-based gains, with only the energy and utilities sub-indexes registering slight losses.
Declining issues outnumbered advancing ones on the TSX by 164 to 80, for a 2.05-to-1 ratio on the downside.
The Federal Reserve's hint about unwinding balance sheets, the possibility of the European Central Bank tapering stimulus and the looming debate about the USA debt ceiling in the fall challenge the market's recent performance, Mr. Baele said.