The rise in geopolitical tensions this week, which heightened after US President Donald Trump on Tuesday warned North Korea that it would face "fire and fury" if it threatened the United States, has drawn investor attention away from second-quarter corporate earnings season, which is winding down.
The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe .miwd00000pus lost 1.1 percent in its third straight day of declines, as it pulled further back from all-time highs.
Gains among technology companies helped snap a three-day losing streak for USA stocks Friday, though the market ended with its worst weekly loss since March. Small-company stocks fell more than the rest of the market.
Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programmes as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.
"Risk-off sentiment dominates Asian markets into the end of the week with President Donald Trump's words still sending shockwaves into the markets", said Jingyi Pan, market strategist at online trader IG.
The Russian dollar-traded index RTS was down 1.49 percent, and ruble-traded MICEX fell 1.29 percent by midday.
The Standard & Poor's 500 index rose 4 points, or 0.2 percent, to 2,442 as of 2:43 p.m.
The Nasdaq Composite was up 19.35 points, or 0.31 percent, at 6,236.22.
The last time the S&P closed down more than 1 per cent was May 17 when it fell 1.8 per cent. All the indexes are down for the week.
The bond market was without direction: the yield of u.s. Treasury bills to 10 years, which evolves to the inverse of the bond price, appears to 2,190 %, compared to 2,198 % Thursday evening, and that bills to 30 years at 2,786 %, compared to 2,773 %.
The modest rebound came at the end of a turbulent week on Wall Street as escalating tensions between the USA and North Korea rattled global markets. WTI oil prices are trading lower by 0.5 per cent at $48.34 a barrel, while MCX oil prices are trading lower by 0.6 percent at Rs 3,108 a barrel. The stock lost $5.07 to $101.91. Regions Financial shed 23 cents, or 1.6 percent, to $14.07. Australia's S&P/ASX 200 dropped 1.2 percent. The Japanese markets were closed for a holiday. The benchmark Kospi tumbled 39.76 points or 1.7% to 2,319.71, its lowest level since May 24th.
Seagate Technology gained 2.3 percent after investor ValueAct disclosed that it had acquired a 7.2 percent stake in the digital storage company.
Nevertheless, traditional safe havens jumped, with the benchmark 10-year USA note yield hitting its lowest level since June 28 and gold futures surging more than 1 percent. While the French CAC 40 Index fell by 0.6%, the German DAX Index slumped by 1.1% and the UK's FTSE 100 Index plunged by 1.4%.
In commodities trading, United States crude oil was wallowing around $49 to the barrel amid speculation that a predicted gain in American output will offset OPEC-led efforts to trim a global glut.
The dollar fell to 109.85 yen from 110.48 yen late Tuesday.