At the close trading in NY, the Dow Jones Industrial Average was down 204.69 points, or 0.9%, to 21,844.01, its biggest one-day fall since May 17.
The Dow Jones Industrial Average was down 82.37 points, or 0.37 percent, to 22,002.97, the S&P 500 had lost 8.34 points, or 0.34 percent, to 2,466.58 and the Nasdaq Composite had dropped 38.99 points, or 0.61 percent, to 6,331.47.
In other words, investors are dumping stocks and buying bonds, which many view as a safe haven in times of turmoil. "And while risks remain elevated from a geopolitical perspective, valuations are not necessarily excessive, though full". The lack of pickup in inflation, despite low unemployment, remains a mystery. Is that a reason to be?
Trucking and software stocks are also seeing notable strength in mid-day trading, while steel stocks have moved sharply lower on the day.
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.
Analysts pointed to the harsh threats and sabre rattling from US President Donald Trump, including a message Wednesday on Twitter boasting the United States' nuclear arsenal was now "more powerful than ever before". The S&P is looking at a decline of 1.3%, its worst week since March. The Russell 2000 index gave up 24.40 points, or 1.7 percent, to 1,372.54.
Economic data showed U.S. producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while separate figures showed the number of Americans filing for unemployment benefits unexpectedly rose last week.
Consumer-focused stocks, media companies and banks accounted for much of the market decline.
"Geopolitics splashed cold water on the markets", said J. J. Kinahan, chief strategist at TD Ameritrade.
Shares of Manulife, which reported better-than-expected results, fell after the company played down talk of a John Hancock spin-off.
Nvidia Corp.(NVDA) shares fell 5.5%, even after the chip maker posted upbeat earnings late Thursday. Macy's stock has reversed earlier losses, now up 1.4% in pre-market trading. Markets in greater China mirrored the slide in global equities.
The S&P 500, which had its biggest one-day drop in nearly three months on Thursday, was on track to post its biggest weekly decline since November.
On Wednesday, North Korea's military said it is considering missile strikes near Guam, warning that it is ready to stage an all-out war if Washington launches a preventive war against it.
High-flying technology names suffered outsized losses on the day, with Apple falling 3.2 percent, Amazon 2.6 percent and Facebook 2.2 percent.