Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific territory of Guam.
The Dow Jones Industrial Average ended down 33.08 points, or 0.15 percent, at 22,085.34, snapping a 9-day streak of closing records.
The Nasdaq Composite .IXIC was down 68.30 points, or 1.08 percent, at 6,284.03.
The Toronto Stock Exchange's S&P/TSX composite index was down 39.02 points to 15,217.33 in a broad-based decline that saw many sectors finish in the red while bullion stocks surged almost 1.9 per cent.
Tillerson's tone was in sharp contrast to that of United States president Donald Trump, who warned on Tuesday any North Korean threat to the U.S. would be met with "fire and fury".
Investors are losing enthusiasm for Canada's banking stocks as a slowdown in the country's housing market dents banks' growth prospects, with insurance companies seen as a better bet to benefit from higher interest rates.
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"When you have a market like we have had this year, and it has been amazingly calm, and you introduce a major source of uncertainty, there is bound to be some reaction", said Brad McMillan, chief investment officer for Commonwealth Financial.
The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon.
The CBOE Volatility Index .VIX , the most widely followed barometer of expected near-term stock market volatility, rose to a near three-month high of 15.36.
"If anything, maybe that statement wasn't tough enough", Trump said to a pool of reporters Thursday.
Shares of Snap were off about 13 percent premarket following the social media company's earnings that came below estimates and a slew of price target cuts.
Disney dropped 4.5 percent after reporting a weak quarter and saying it would pull its movies from Netflix and start two of its own video streaming services. The stock fell another 2 cents, or 0.4%, to 5.12 Friday.
The rhetoric between the US and North Korea has continued to heat up, leading traders to look to safe havens such as gold and treasuries.
In Europe, Germany's DAX rose 0.3 percent, while France's CAC 40 added 0.2 percent. Core prices had been expected to rise by 0.2%.