The dollar was further weighed Friday by the soft US inflation data.
For the week, the Dow Jones Industrial Average declined 1.1%, and the S&P 500 fell 1.4%. Dillard's slumped 15.3 percent after the chain booked a loss for the second quarter as increased inventory led to big discounts.
But despite the largest percentage drop in over a month on a global equities index, USA equities ended only slightly lower as healthy corporate earnings and a recent string of strong economic data enticed investors into beaten-down stocks.
UP WITH TECH: Investors bid up technology sector shares.
Technology companies led a broad slide in US stocks late Thursday afternoon, putting the market on track for its biggest loss in two months.
Ryu Yong-seok, a market analyst at KB Securities Co., said tensions between North Korea and the United States are a negative factor in the local stock markets that dragged down the index. The Dow slid 33.08 points, or 0.2 percent, to 22,085.34. The Nasdaq Composite Index added 36 points, or 0.5 percent, to 6,252. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.57 percent lower, while Japan's Nikkei percent.
"Despite all this rhetoric, there is a general feeling that we are not going to go up to the war", said Karl Haeling, holding that this had provided little support to the market.
"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management.
"What has changed this time is that the scary threats and war of words between the USA and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney, as quoted by Reuters. Especially, after the fall of the previous day, he felt that the market was too lowered, and he therefore took advantage of a technical rebound.
Over the five days, the S&P 500 dropped 1.43 percent, one basis point shy of the year's biggest weekly drop, posted in March.
The euro held steady at $1.1818, having pulled up from Friday's intraday low of $1.1749.
In other corporate results, a number of companies reported forecast-beating numbers.
Data on tap: The Labor Department will release July data on consumer-price inflation at 8:30 a.m. Economists polled by MarketWatch are forecasting a 0.2% monthly rise for both measures, after flat reading the prior month. "If you think this is just rattling sabers, and it's just words, then you could view this as a buying opportunity". The stock slid $9.41, or 5.7 percent, to $155.33. Macy's was down 10.2 percent after the company said its sales continued to decline in the second quarter.
Canadian Tire Corp Ltd rose 3.4 percent to C$146.65.
United Kingdom mid-cap Dixons Carphone was the worst-performing, falling 7.6 percent after a top-rated Exane BNP Paribas analyst cut the retailer by two notches to "underperform", citing concerns about its mobile business.