Equities slid, while US Treasuries and gold climbed, as US President Donald Trump's latest comments further inflamed tension with North Korea.
If the North Korean regime "does anything" to the US or a US ally "things will happen to them like they never thought possible," Trump told reporters on Thursday, according to Bloomberg.
Wall Street's fear gauge-the CBOE Volatility Index jumped 36 per cent to 15.06.
"The markets in general are very on edge and they're very leery about risk," Mariann Montagne, a portfolio manager at Gradient Investments, told Bloomberg. "When earnings are not beating expectations there's a sell off in the companies, and we're just not seeing that money reinvested because of the geopolitical risks."
In 3.23pm trading in New York, the Dow Jones Industrial Average gave up 0.7 per cent, while the Nasdaq Composite Index dropped 1.8 per cent. In 3.08pm trading, the Standard & Poor's 500 Index fell 1 per cent.