Growing tension between the United States and North Korea boosted the Swiss franc, the Japanese yen, gold and government bonds as investors sought out traditional safe havens at a time of geopolitical uncertainty.
The dollar index, which tracks the greenback against a basket of six major rivals, was almost flat on the day at 93.657, remaining above last week's 15-month low of 92.548.
Six of the 11 major S&P sectors were higher, with the technology's .SPLRCT 0.36 percent rise leading the advancers.
U.S. stocks deepened their losses following the latest Trump comments, and the S&P 500 volatility index, known unofficially as the "fear index", rose decisively.
The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a vehicle hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%.
MSCI's emerging market index snaps a three-day winning streak to fall 0.7 percent - its steepest daily decline since early July.
North Korea had responded to Mr Trump's previous promise to unleash "fire and fury", with a threat to land a missile near the US Pacific territory of Guam. The reclusive state raised the stakes further with a detailed plan to send a salvo of missiles towards the U.S. territory of Guam.
Gold held steady at two-month high with spot gold rising 0.1 percent to $1,287.83 per ounce, putting the precious metal on pace for its biggest weekly gains since April.
Shane Oliver, head of investment strategy at AMP Capital in Sydney, said: "What has changed this time is that the scary threats and war of words between the United States and North Korea have intensified to the point that markets can't ignore it". Nonetheless, most Americans (72 percent) are uneasy about the possibility of conflict with North Korea, according to a CBS News poll, and 61 percent say they are uneasy about the president's approach to the situation. "Yet given the military power of both nations, there is no surprise we are seeing markets shift out of risk assets".
The president didn't show signs of letting up on the tough rhetoric. That "looks high enough to be consistent with a 5 per cent-plus pace for real GDP growth, " Jim O'Sullivan of High Frequency Economics said in a report. Most observers believe the next hike will come in December.
The Korean won KRW=KFTC also continued to skid, sliding 0.3 percent to 1,145 won to the dollar, after earlier sinking to its lowest level in a month.
In other words, investors are dumping stocks and buying bonds, which many view as a safe haven in times of turmoil.