Trump tweeted yesterday about the strength of the American nuclear arsenal, but expressed hope it would not need to be used.
The three main indexes were all down Wednesday with the Dow Jones industrial average off 36.64 points, or 0.17%, at 22048.70 points, the Standard and Poor's 500 losing 0.04% at 2474.02 points and the Nasdaq composite giving back 0.28% at 6352.33 points. A gauge of volatility on the S&P 500, the VIX hit its highest reading for over a month. Hong Kong's Hang Seng Index finished down 1.1%, while the Shanghai Composite Index fell 0.4% and Japan's Nikkei Stock Average lost less than 0.1%.
Traditional safe-haven currencies including the Swiss franc and Japanese yen rose against the United States dollar, while those from emerging markets slid.
Markets had earlier stabilised as U.S. secretary of state Rex Tillerson tried to ease the tensions, saying he did not believe there is "any imminent threat" to Guam and that diplomacy would prevail. In the absence of bad news, you're going to stay the same or go a little higher.
The US-North Korea spat that allowed safe havens to rally this week continued during today's European session.
The Swiss franc, the other traditional currency safety-play, has benefited too.
The euro was 0.18 percent lower against the greenback but remains the best-performing G10 currency so far this year with gains of more than 11 percent against the dollar.
Japan is the world's biggest creditor country and there is an assumption investors there will repatriate funds in a crisis.
The dollar index was trading 0.2 percent up at 93.73.
The Korean story has seen the yen gain around 1.5 percent this week, its biggest rise since mid-May. Mainland China share prices fell on worries regulators will continue to clamp down on debt.
The blue-chip South African insurer and investment group said its pretax profit in the six months to the end of June grew to GBP940.0 million from GBP534.0 million in the first half of 2016, as revenue rose to GBP10.82 billion from GBP7.48 billion.
Energy stocks retreated 0.5 percent, despite higher oil prices.
"The latest threats over North Korea have finally escalated to the point where market has been obliged to react", Ric Spooner, chief market analyst at CMC Markets, wrote in a note. Brent crude, used to price global oils, gained 40 cents to $52.54 in London.
US crude oil crude futures CLc1 were little changed at $48.59 per barrel.
The Swiss franc, another safe-haven, failed to maintain momentum from earlier days, losing ground relative to the euro and was last broadly flat versus the dollar after dollar/franc fell to a fresh two-week low 0.9582 earlier in the day.