Wall Street's downbeat start followed a slide in major stock indexes in Europe and Asia.
Amid the hot rhetoric, US stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent. "Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued USA stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies".
NASDAQ measures a number of indices reflecting the reaction of USA's high tech markets and business environments on the country's political and economic developments which have an impact on high tech markets.
This morning global stocks declined for the second day in a row, with the FTSE 100 falling 0.8 per cent to 7,327 points in early trading, while the Dax fell 0.2 per cent and the Cac 40 fell 0.6 per cent.
Gold climbed to the highest since mid-June, pushing up mining-company shares amid military tensions between the US and North Korea. The Russell 2000 index of smaller-company stocks gave up 10 points, or 0.8 percent, to 1,399.
The dollar was up 0.05 percent to 109.25 yen JPY=, after earlier falling to a sixteen-week low following data showing USA consumer prices rose less than expected in July.
The S&P was, however, on track to post its biggest weekly loss in about five months and the Dow on course to record its biggest weekly fall in almost four months.
The North Korea situation isn't the only thing weighing on stocks.
Materials, home to gold producers and other resource-based companies, was the only gainer among the index's 10 main sectors and was up 0.6 percent.
The Labor Department said its consumer price index inched up by 0.1% in July after coming in unchanged in June. The S&P 500 added 3.11 points, or 0.1%, to 2441.32, ending the week down 1.4%, its biggest loss since March. Perrigo rose $1.58, or 2.1 percent, to $78.43.
Burger chain Wendy's was up 4.20 per cent after it reported better-than-expected quarterly profit and sales. Hong Kong's Hang Seng dipped 1.1 per cent to 27,444.00.
Macy's shares closed down 10.2 per cent and Kohl's fell nearly 6 per cent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off. On the Nasdaq, 1,787 issues fell and 564 advanced. For the week, the benchmark slipped 2.6%.
According to analyst Simona Gambarini, the price of gold "tends to rise in anticipation of a conflict but often falls when tensions turn into a full-blown war". Japan was closed on a public holiday. Australia's S&P/ASX 200 dropped 1.2 percent to 5,693.10.