All three U.S. indices fell sharply, with the broad-based S&P 500 tumbling 1.5 percent.
At 12:28 p.m. ET (1628 GMT), the Dow Jones Industrial Average was down 52.87 points, or 0.24 percent, at 22,032.47, the S&P 500 was down 2.8 points, or 0.11 percent, at 2,472.12.
The FTSE 100 Index closed down 1.4%, or 108.12 points to 7,389.94, with Pyongyang unveiling plans to launch a volley of ballistic missiles towards the US Pacific territory of Guam, an America military hub.
"There is a low probability that we will have a war with North Korea", he said, and a larger pullback in stocks is "a buyable drop". Earlier in the week, Trump said the US would unleash "fire and fury" on North Korea if it continued to threaten the U.S.
At a briefing on opioid addiction at his golf course in Bedminster, New Jersey, Trump warned North Korea not to make any more threats against the United States, adding that North Korea would be "met with fire and fury like the world has never seen".
More than 430 stocks from all USA exchanges hit their lowest levels in 52 weeks or more yesterday, the most for any session since mid-November right after Trump was elected.
"Risk aversion is once again the name of the game.as geopolitical tensions mount and investors head for cover in the traditional safe havens", said Oanda analyst Craig Erlam.
Benchmark 10-year notes last rose 5/32 in price to yield 2.194 percent, from 2.211 percent late on Thursday.More news: North Korea threatens physical actions after United Nations sanctions
North Korea has since threatened to launch missiles at the US territory of Guam, and the country previously threatened "all-out war, wiping out all the strongholds of enemies, including the USA mainland".
Investors also drew some encouragement from new government data showing US inflation at the consumer level inched higher last month.
US trading volume has been low with summer setting in and Congress expected to be in recess until September 5.
Across Europe, Gemany's Dax was off 1.2% and the Cac 40 in France dropped by 0.6%.
USA crude oil futures settled almost 2 percent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.
Barrick Gold Corp rose 2.1 percent to C$21.7, while Goldcorp Inc rose 0.9 percent to C$16.29.
Gold fell $2.10 to $1,262.60 an ounce.
Macy's shares closed down 10.2 percent and Kohl's 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. Netflix was down 1.8 percent.