Overnight, Wall Street closed sharply lower after Trump, with fiery rhetoric, warned Pyongyang against attacking Guam or United States allies after it disclosed plans to fire missiles over Japan to land near the U.S. Pacific territory.
At 12:36 p.m. ET (1636 GMT), the Dow Jones Industrial Average was down 158.98 points, or 0.72 percent, at 21,889.72 and the S&P 500 was down 27.37 points, or 1.11 percent, at 2,446.65.
Sterling GBP= was last trading at $1.2986, down 0.35 percent on the day.
The Nasdaq Composite was down 115.35 points, or 1.82 percent, at 6,236.98.
Trump had told North Korea to not "make any more threats" to the US or the country "will be met with fire and fury like the world has never seen".
London's FTSE 100 was almost 1% down during morning trading with share indices in Germany, France and Italy also in the red.
"As a portfolio manager, you say, 'Do I think we'll get a war out of this?' " said Torsten Slok, chief worldwide economist at Deutsche Bank, referring to the bluster between North Korea and President Donald Trump.
The decline was broad, with all the 11 major S&P indexes lower.
Nordstrom Inc.(JWN) shares rose 1.6% after the retailer late Thursday posted earnings that beat expectations (http://www.marketwatch.com/story/nordstrom-shares-rise-after-retailer-tops-views-sales-rise-2017-08-10), along with a sales rise.
The biggest risers on the FTSE 100 Index were Smurfit Kappa up 38p to 2,224p, Persimmon up 39p to 2,501p, DCC up 70p to 6,885p, Barratt Developments up 6p to 595.5p.
Pilot ejects, escapes injury as USA fighter jet crash lands in Bahrain
A fighter jet has crash landed at Bahrain International Airport, disrupting flights to and from the island nation. Social media pictures of the aircraft showed the grey fighter jet's nose tipped into the air but largely intact.
This week, the S&P 500 started on a stronger note by rising to new record high price levels.
The falls were echoed in other European markets, with Germany's Dax index down 1.2% and France's Cac 40 falling 0.73%.
Only utilities sector stocks eked out a gain on a day of mostly listless trading as investors kept an eye on the latest company earnings and geopolitical news.
The North Korea situation isn't the only thing weighing on stocks.
Avis Budget Group slumped 9.9 percent after the vehicle rental company cut its guidance following a weak second quarter.
Michael Hewson, chief market analyst at CMC Markets, said these comments brought an entirely predictable counter response from Pyongyang.
USA crude rose 0.41 percent to $48.79 per barrel and Brent was last at $52.01, up 0.21 percent.
The September crude contract was up 20 cents to US$49.76 per barrel and the September natural gas contract was up seven cents to US$2.95 per mmBTU. On the Nasdaq, 1,846 issues fell and 953 advanced favoring decliners. Meanwhile, markets in Japan, South Korea and other Asian countries were also lower, and so-called futures signaled that US markets would also open down. The September copper contract was down two cents to $2.91 a pound.
The umbrella financials group slipped 0.3 percent.
The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday.