President Donald Trump told North Korea on Friday that the USA military was "locked and loaded", while Pyongyang accused him of driving the Korean peninsula to the brink of nuclear war. We should also be aware of the risk of responding to geo-political shocks by selling assets: too often we find ourselves selling at the moment of highest fear, only to be out of the market as a rebound in stock market prices takes place as tensions wind down.
KEEPING SCORE: The Standard & Poor's 500 index fell 3 points, or 0.1 percent, to 2,471 as of 12:16 p.m. Eastern time. The Dow Jones industrial average slid 120 points, or 0.5 percent, to 21,928.
The S&P was, however, on track to post its biggest weekly loss in about five months and the Dow on course to record its biggest weekly fall in almost four months.
Politics lifted US defense stocks. Away from the geopolitical drama, US inflation data is due at 1330 GMT.
The markets may benefit from bargain hunting, as some traders look to pick up stocks at reduced levels following the pullback seen over the past few sessions.
Sterling was last trading at $1.3013, up 0.30 percent on the day. These have ranged from an investigation into Russia's possible interference in the 2016 United States presidential election, to concern about China's risky debt levels, to stubbornly low inflation in the US.
FINANCIALS FALLING: Several financial sector companies also helped pull down the market.
The Korean won continued to fall versus the dollar, down 0.13 per cent to 1,143.5 yesterday for a 1.6 per cent decline on the week.
Burger chain Wendy's was up 4.20 per cent after it reported better-than-expected quarterly profit and sales. Global stock markets fell.
Avis Budget Group slumped 9.9 percent after the vehicle rental company cut its guidance following a weak second quarter. Its shares tumbled $11.35 to $61.99. Discovery Communications fell 70 cents, or 2.9 percent, to $23.60.
Charter Communications rose 2.9 percent on news Altice is exploring a bid for the cable giant.
The benchmark 10-year yield fell 3 basis points to 2.25% while the two-year yield lost 2bps to 1.35%.
Amid the hot rhetoric, USA stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent. It added 39 cents to $49.56 a barrel on Wednesday.
Elsewhere in commodities, the September crude contract was up 39 cents to $49.56 United States per barrel, September natural gas advanced six cents at $2.88 U.S. per mmBTU and September copper declined two cents at $2.93 USA a pound.
S&P 500 e-mini futures were down 0.2 percent, while the dollar dipped 0.2 percent against its perceived safe-haven Japanese counterpart to 110.12 yen. The euro rose to $1.1812 from $1.1774.
MARKETS OVERSEAS: Major indexes in Europe were headed lower. Japan's Nikkei 225 slipped 0.3 percent, while Australia's S&P/ASX 200 lost 0.5 percent.
Sterling was last trading at US$1.3007, up 0.25 per cent on the day.