Overnight, Wall Street closed sharply lower after Trump, with fiery rhetoric, warned Pyongyang against attacking Guam or USA allies after it disclosed plans to fire missiles over Japan to land near the U.S. Pacific territory.
In 3.23pm trading in NY, the Dow Jones Industrial Average gave up 0.7 percent, while the Nasdaq Composite Index dropped 1.8 percent.
The Nasdaq finished the day at 6,216.87, a slide of 135.46, while the S&P 500 lost almost 1.5 percent, ending the day at 2,438.21.
Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent 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.
But although US equities on Wednesday managed to close only slightly down even after Trump's warning that "fire and fury" would rain on North Korea, on Thursday the chickens came home to roost on Wall Street.
The pan-European FTSEurofirst 300 index lost 1.01 per cent and MSCI's gauge of stocks across the globe shed 0.26 per cent for a weekly loss of 1.6 per cent, the largest since the week to November 4.
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North Korea has since threatened to launch missiles at the USA territory of Guam, and the country previously threatened "all-out war, wiping out all the strongholds of enemies, including the US mainland".
The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts.
The Dow slid as declines in shares of Apple and those of Goldman Sachs, recently down 2.3 percent and 1.7 percent respectively, outweighed gains in shares of McDonald's and those of Coca-Cola, recently up 1.4 percent and 0.5 percent respectively.
Barrick Gold Corp rose 2.1 percent to C$21.7, while Goldcorp Inc rose 0.9 percent to C$16.29. Prices for bonds and gold headed higher.
Nordstrom shares were up 1.63 percent at $45.60 following the apparel retailer's better-than-expected quarterly same-store sales. "The North Korea situation appears to be the culprit".
And in a textbook-type cross-asset move toward safety in times of trouble, the Japanese yen hit an eight-week high against the US dollar while spot gold also reached a two-month high.
Anne Applebaum: Trump's toothless threats endanger us all
Yun and North Korean diplomat Pak Song II negotiated the release of imprisoned American college student Otto Warmbier in June. "President Trump's threat to rain down "fire and fury" on North Korea is like pouring gasoline on a fire".
Michael Hewson, chief market analyst at CMC Markets, said these comments brought an entirely predictable counter response from Pyongyang.
"With the North Korean authorities taking the heat off the nuclear threats, we expect the market pressure to cool off, as long as the US President also manages to read "truce" between the lines".
Avis Budget Group slumped 9.9 percent after the vehicle rental company cut its guidance following a weak second quarter.
OIL: Benchmark U.S. crude fell 35 cents to $49.04 a barrel on the New York Mercantile Exchange. On the Nasdaq, 2,303 issues fell and 567 advanced. The September copper contract was down two cents to $2.91 a pound.
Japan's Nikkei 225 slipped 0.3 percent, while Australia's S&P/ASX 200 lost 0.5 percent.
The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday.
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