Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe posted its largest weekly drop since the week before Donald Trump won the presidential election in November.
Russian Foreign Minister Sergey Lavrov warned on Friday that a war between the USA and North Korea would be disastrous, and said his country was proposing - in conjunction with China - a path to a peaceful resolution of the nuclear standoff. Silver also rose, gaining 43 cents, or 2.6 percent, to $16.82 an ounce.
In economic news, German consumer inflation grew an annual 1.7% in July, slightly faster than the 1.6% increase registered in June, final data from Destatis showed.
The all-important July inflation numbers out of the USA failed to satisfy dollar bulls' hopes of strongly putting a Fed rate hike later in the year back on the table.
Markets also await speeches by Fed officials Robert Kaplan and Neel Kashkari for further direction.
CURRENCIES: The dollar fell to 109.96 yen from 110.48 yen late Tuesday. The Dow slumped 204.69 points or 0.9% to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1% to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5% to 2,438.21.
Guam residents warned about nuke blast if North Korea attacks
Residents of the United States island of Guam say they're anxious but overall "unworried" amid missile threats from North Korea. Calvo responded by saying he feels safe and confident with Trump's leadership: "I'm glad you're holding the helm, sir".
BAD LOOK: Investor concerns about slowing growth in Nvidia's data center business weighed on the company's shares, even though the maker of graphics chips posted earnings that beat expectations. "There are four more (inflation) prints between now and the December FOMC meeting and we expect the Fed to remain data-dependent, if a touch more cautious", TD Securities said in a note.
NAB lost 1% despite the bank reporting a 5% rise in its third-quarter cash profit. WTI oil prices are trading lower by 0.5 per cent at $48.34 a barrel, while MCX oil prices are trading lower by 0.6 percent at Rs 3,108 a barrel.
KEEPING SCORE: The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,466 as of 11:20 a.m.
USA gold futures for December delivery was mostly unchanged at $1,290.50 per ounce. With Asian bourses and U.S. stock futures weakening early on Wednesday, the safe-haven 10-year Treasury yield was last down 3 basis points. The euro held steady at $1.1752.
The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday. Britain's FTSE 100 was down 1.1 percent. "Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.The dollar index .dxy , which measures the U.S. currency against a basket of other major currencies, fell 0.14 percent.The dollar weakened after news that U.S. producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.U.S. Treasury long-dated yields dropped to six-week lows, pressured by U.S. The index closed at its highest level since November 8, when Trump was elected president. Australia's S&P/ASX 200 dropped 1.2 percent.