Losses in health care and consumer-focused companies pulled USA stocks broadly lower Tuesday, snapping a 10-day winning streak for the Dow Jones industrial average.
U.S. President Donald Trump's warning North Korea faced "fire and fury" and Pyongyang's threat of possible retaliation drove investors out of stocks and into the yen, Swiss franc, gold and government debt.
In Europe, Germany's DAX fell 1.1 percent, while France's CAC 40 slid 1.4 percent.
President Trump took aim at North Korea again on Thursday, saying that his earlier threat to unleash "fire and fury" may not have gone far enough.
US stocks headed lower in early trading Wednesday, Aug. 9, 2017, as traders weighed the growing tensions between the USA and North Korea.
THE QUOTE: "Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.0 percent to C$93.36, and Manulife Financial Corp falling 2.8 percent to C$24.93.
Separately, U.S. producer prices unexpectedly fell in July, recording their biggest drop in almost a year, weighed down by declining costs for services and energy products.
Still, the S&P and the Dow were on track to post their biggest weekly loss in about five months and the Nasdaq on course to post its biggest weekly fall in about six weeks.
(Employees push a trolley laden with crates of one kilogram gold bars at the YLG Bullion International Co. headquarters in Bangkok, Thailand.Getty Images/Dario Pignatelli/Bloomberg) Gold has rallied 2.3% this week on the heels of renewed tension with North Korea.
Spot gold added 0.7 percent to $1,286.00 an ounce.
On Friday, the S&P 500 rose 3.11 points, or 0.1 percent, to 2,441.32.
In the latest economic data, the consumer-price index (http://www.marketwatch.com/story/us-consumer-inflation-remains-soft-in-july-cpi-shows-2017-08-11) rose a seasonally adjusted 0.1% in July, its fifth straight month of softness, raising more questions about whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target.
The all-important July inflation numbers out of the United States failed to satisfy dollar bulls' hopes of strongly putting a Fed rate hike later in the year back on the table.
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.
Shares Snap fell 1.94, or 14%, to 11.83 after the Snapchat parent reported earnings late Thursday that missed analyst forecasts.
Traders snapped up shares in companies that delivered strong quarterly results. Chinese blue chips closed flat but Hong Kong's Hang Seng Index fell 0.4%. Australia's S&P/ASX 200 dropped 1.2 percent.
BONDS: Bond prices rose. Japan was closed on a public holiday.