It is now on track for its biggest weekly drop since the week before the November 8 USA presidential election. The slide deepened after Mr Trump's remarks on North Korea aired.
Tensions have been rising in the Korean Peninsula, and reached a new level with President Trump's "threat" of "fire and fury" against North Korea if they should proceed with a missile strike against Guam, a United States territory located in the Pacific.
US stock futures were marginally softer on Friday.
US crude was down 0.9 percent at $48.16 per barrel, on track for a weekly loss of 2.9 percent.
Although Japan could be in the front line of any clash with North Korea, the yen is benefitting because Japan is the world's biggest creditor nation and Japanese investors tend to repatriate funds in times of stress, attracting other flows. The Swiss franc is a traditional safe haven.
Perrigo Co.(PRGO) shares rallied 16% after the drugmaker topped Wall Street estimates (http://www.marketwatch.com/story/perrigo-is-the-rare-generic-drugmaker-that-isnt-suffering-right-now-2017-08-10) for the quarter. This week has been its biggest rise since June 2016. While North Korea often threatens to attack the United States, the revelation of this plan was unusual.
There have been some markets which have benefitted from the US-North Korean sabre rattling. "But with the rhetoric having gone to a different level, the market just can't afford to take that risk".
Stocks are lower at midday as investors weighed the growing tensions between the USA and North Korea.
The Chinese volatility gauge jumped by the most since January 2016, to its highest level in more than seven months.
The S&P 500 lost 9.74 points, or 0.39 per cent, to 2,465.18.
Secretary of State Rex Tillerson later insisted the USA isn't signalling it's about to mete out a military response despite threats from North Korea suggesting it could attack Guam, a US island territory in the Pacific.
Escalating tensions around Pyongyang's nuclear ambitions sent a shiver through markets worldwide and pushed the dollar to below 109.7 yen in afternoon forex trade to an eight-week low against the safe haven currency, piling more pressure on Japanese stocks.
In Asia, South Korea's benchmark Kospi index fell 1.1%, and the Nikkei in Tokyo sank 1.3%.
Pyongyang responded with threats to launch preemptive military strikes against the US, including targeting the Pacific island territory of Guam.
The number of people who applied for USA unemployment-insurance benefits rose by 3,000 to 244,000 in the week that ended August 5, the Labor Department reported.
Gold was up for the third day, hitting an intra-day high of $1,280.38 an ounce that was last recorded mid-June. It soared over 2 per cent in the previous two sessions, and is set for a weekly gain of 2.25 per cent.
Crude oil prices tumbled on the back of the selloff on Wall Street and lingering concerns over global oversupply.
USA crude was down 0.9 per cent at US$48.16 per barrel, on track for a weekly loss of 2.9 per cent. Elsewhere, the German Dax has opened down 0.80%, France's CAC40 index is down 0.87%, and the Euro Stoxx 50 is down 0.81%. Regeneron Pharmaceuticals led the pack, adding $4.47, or 1 percent, to $474.15.
Steel and copper prices stayed strong in metals markets.