On Thursday, the three major USA indexes logged their worst performances since mid-May (http://www.marketwatch.com/story/us-stocks-set-up-for-another-day-of-losses-as-north-korean-tensions-simmer-2017-08-10) in a session dogged by escalating tension between the us and North Korea.
US President Donald Trump issued a new threat to North Korea, saying American weapons were "locked and loaded" as Pyongyang accused him of driving the Korean Peninsula to the brink of nuclear war.
London's FTSE 100 dipped by about 90 points, or more than 1%, in morning trading on Friday, adding to a slump of more than 100 points the day before and taking it to its lowest level since May.
Asian stock markets have extended a global slide today, as tensions ramp up between the United States and North Korea, sending investors fleeing to less risky assets such the yen and the Swiss franc.
The Straits Times Index sank 1.31 per cent or 43.52 points to 3,279.72, down 1.4 per cent for the week. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.
A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalisation drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday. On Tuesday, August 8, despite that new record high, the market pulled back and closed lower due to decreased risk appetite. The Hang Seng index ended down 1.1% at 27444.00 points.
Thursday's selling in the US extended to global markets Friday.
Keith Ellison: 'Irresponsible' Trump could bring about first strike by North Korea
He said: "I am concerned by reports that detainees are not receiving due legal process and are being held in inhumane conditions". North Korean leader Kim Jong Un wants world recognition for his regime and the US needs to stop backing him into a corner.
News that US producer prices unexpectedly fell in July earlier helped send the dollar lower.
Futures markets were also pointing to a lower start for Wall Street, where missile makers have been the only significant gainers in recent days.
"From a geopolitical perspective, we understand why the escalation in tensions will have shaken some of the complacency out of investors", said Eric Wiegand, senior portfolio manager at U.S. Bank Private Client Wealth Management. For the week, the benchmark slipped 2.6%.
The technology sector .SPLRCT was the S&P's biggest drag with a 2.2 percent drop. Spot gold inched down 0.1 percent to $1,284.64 per ounce as of 0616 GMT, but was set for a weekly gain of over 2 percent.
Despite the past week's decline, the major indexes are in positive territory so far this year, led by the Nasdaq, which is up 16.2 percent.
However, market watchers said equity markets remained focused on the deepening geopolitical crisis, as angry threats from Washington and Pyongyang stoke fears of a catastrophic miscalculation with global consequences.
Elsewhere in commodities, the September crude contract advanced 20 cents to $49.76 per barrel and the September natural gas contract was up seven cents to $2.95 per mmBTU.