"That may have weighed a little bit" on markets, said Phil Guarco, global investment specialist J.P. Morgan Private Bank.
By mid-morning in NY investors began to look for stocks to buy rather than offload and the Dow Jones industrial average was 38.65 points higher at 21,882.92 while the S&P 500 was...
Eight of the 11 major S&P sectors were lower, with the consumer discretionary index's 0.59 percent fall leading the decliners. The drop on the day ended the Dow's streak of setting new record closing highs for nine consecutive sessions. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman and the Dow Jones U.S. defense index was up 1.48 percent after hitting a record high. Gold rose as much as 1.2 percent to a near two-month high, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years.
The CBOE Volatility Index, or VIX, the most widely followed barometer of expected near-term stock market volatility, was up as much as 12.63 points, its highest in more than a month. The slide deepened after Trump's remarks on North Korea aired. Financials .SPSY fell the most, down about 1 percent.
"If earnings can stay strong and interest rates remain low, investors can look beyond North Korea and continue to rally equities", said Phipps.
Priceline Group toppled 8% after reporting a strong beat with its second-quarter results, but lowering its third-quarter earnings guidance to below the consensus number. Only 3 of the 30 stocks in the Dow finished the day with a gain: IBM, Coca-Cola and McDonald's. The stock has been battling a three-year decline.
Ralph Lauren gained $10.38, or 13.3 percent, to $88.53, while peer-to-peer loan company LendingClub added 99 cents, or 18.1 percent, to $6.45.
All four of the big-tech FANG stocks opened sharply lower.
On the economic front, the Labor Department released a report showing an unexpected drop in US producer prices in the month of July.
In other energy futures trading, wholesale gasoline dipped 1 cent to $1.62 a gallon. With one session left to go, the S&P 500 was headed for a weekly drop of around 1.6%, which would be its biggest since a fall of 1.9% for the week ended November 4, 2016.
Gold fell $2.10 to $1,262.60 an ounce.
United States trading volume has been low with summer setting in and Congress expected to be in recess until September 5.
The pound was down 0.09% against the euro at 1.1049 and down nearly 0.2% on the dollar at 1.2978.
After ending the previous session modestly lower, stocks may see further downside in early trading on Wednesday. Wall Street was poised for a soft opening with S&P futures and Dow futures both down 0.2 percent.
Australia's benchmark S&P/ASX 200 index bucked the trend to climb 0.52%, driven by gains in its heavily-weighted financials sub-index, which rose 0.8%. South Korea's Kospi fell 0.2 percent. Early Friday, the ICE Dollar Index was up just 0.04% to 93.437.