The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors a reason to pocket profit in the sectors such as technology that have been the biggest gainers in recent months, analysts said.
Nevertheless, the geopolitical uncertainty looks set to continue, dealers said, following Trump's fresh warning Thursday that his earlier threat to unleash "fire and fury" on the reclusive nuclear-armed state may not have been "tough enough".
"The VIX index of implied future volatility on the S+P 500 index (the so-called 'fear index), jumped to a three-month high of over 15, and we saw growth-orientated stocks underperform their value counterparts across developed stock markets".
Canada's main stock index hit its lowest close in a month on Thursday as oil prices fell and investors sought refuge in safe-haven assets amid rising tensions between the United States and North Korea. Tokyo's Nikkei 225 tumbled 1.3 percent, while Seoul's Kospi fell 1.1 percent.
Tensions spiked yet further when North Korean state media later said Pyongyang was considering strikes near U.S. military installations in Guam.
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".
Gold has risen to its highest level in nearly two months, while the Swiss franc has powered against the USA dollar and seen its biggest one-day gain against the euro in more than two and a half years.
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Nervous traders have scrambled to take refuge in traditional safe havens such as gold, silver, bonds, Japanese yen and Swiss franc, dampening interest in risk assets such as equities and industrial commodities. While the French CAC 40 Index fell by 0.6%, the German DAX Index slumped by 1.1% and the UK's FTSE 100 Index plunged by 1.4%.
In the first four days of the week, the Standard & Poor's 500 index swung from marking its latest record high to posting its biggest single-day drop in almost three months.
The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 per cent to C$24.43, its largest drop since early August previous year.
The Standard & Poor's 500 index rose 5 points, or 0.2 percent, to 2,444 as of 12:28 p.m.
In Asia, several indexes closed lower overnight.
Traders snapped up shares in companies that delivered strong quarterly results.
The yield on the benchmark 10-year U.S. Treasury note fell to 2.255 percent from its U.S. close of 2.282 percent on Tuesday. Brent crude, used to price global oils, gained 56 cents to $52.70 in London. Meanwhile, the dollar USDJPY, -0.31% fetched ¥109.69, compared with ¥110.31 late Tuesday. The euro rose to $1.1824 from $1.1774.