Stocks in London ended lower on Friday, at the end of a week marked by the escalating tensions between the United States and North Korea, which sent investors away from riskier assets such as equities, moving to safe havens like gold. The VIX was recently up 34% after jumping more than 15% at one point on Wednesday.
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".
In contrast to the US market, global equities remained weak.
Wall Street is also digesting soft inflation data - a key metric the Fed tracks - with the producer price index falling 0.1% in July, its biggest decline in 11 months.
Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific with a military base. The S&P 500 and Dow were both coming off record highs.
The Dow slid as declines in Apple and Goldman Sachs, down 2.3% and 1.7% respectively, outweighed gains in McDonald's and Coca-Cola, up 1.4% and 0.5% respectively. Netflix also fell, giving up $3.19, or 1.8 percent, to $175.17.
The sell-off is likely to extend into the European session today, with financial spreadbetter CMC Markets expecting Germany's DAX and France's CAC 40 to open down about 0.7% each and Britain's FTSE 100 to start 0.55% lower.
Global stock markets have sunk further into the red after Donald Trump ratcheted up his fiery rhetoric over North Korea's nuclear threats.
"Tensions are still high and not going away at the moment".
"That may have weighed a little bit" on markets, said Phil Guarco, global investment specialist at J.P. Morgan Private Bank.More news: #RallyCat interrupts Cardinals game in St. Louis
South Korea's won dropped 0.9 percent against the US dollar to its lowest close since July 13.
The Korean won KRW=KFTC also continued to skid, sliding 0.3 percent to 1,145 won to the dollar, after earlier sinking to its lowest level in a month.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.19 percent from 2.20 percent late Thursday.
CURRENCIES: The dollar slipped to 109.48 yen from 109.85 late Wednesday.
Japan is the world's biggest creditor country and there is an assumption that investors there will repatriate funds in a crisis.
And with that, the S&P 500's steak of 58 days without a 1% move in either direction came to an end.
He continues: "There are few better illustrations as to why a long term investor, keen to maximise returns while keeping portfolio volatility low, should hold core government bonds in their portfolio as part of a balanced portfolio".
Silver futures for September delivery on the Comex rose 2.9 per cent, the biggest gain for a most-active contract since November. It was up about 2 percent for the week so far.
"North Korea responding with a threat to US territory after Trump warned them not to threaten the USA was never going to go down well", Lawler said. Brent crude, used to price worldwide oils, was down 17 cents to $51.73 a barrel in London. Regeneron Pharmaceuticals led the pack, adding $6.99, or 1.5 percent, to $476.67.