The S&P/TSX composite index fell 143.08 points, or 0.94%, to 15,074.25, with almost all of its sectors moving lower.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories.
Perrigo was up 9.5 percent after the company raised its full-year adjusted earnings forecast.
"If you strip away what's going on in North Korea, and if you strip away what's going on in Washington, which are things that are tougher to predict, the economy, the global recovery, earnings, it all paints a very positive picture for the rest of the year", Kravetz said.
Macy's shares closed down 10.2 percent and Kohl's fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.
Prices for bonds and gold headed higher.
Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam.
The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a auto hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%.
Now installed in the White House, Trump issued a new warning to Pyongyang on Friday, tweeting: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely". As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 2.220 percent.
Apple (AAPL.O) pared gains after rising as much as 1.91 percent to an all-time high and provided the biggest boost to all three indexes, while healthcare stocks such as Johnson & Johnson (JNJ.N) were the biggest weight on the S&P. TripAdvisor shares shed $1.75, or 4.4 percent, to $37.80.
At the moment stock falls have not been too dramatic - the bluechip index is at a higher level than it was a week ago.
In Europe, the Stoxx 600 Index finished the day with a decline of 1 percent from the previous close. The FTSE 100 index of leading British shares declined 0.6 percent. The Korea tensions though have seen both US and European markets this week push back expectations of when the Fed and ECB might hike interest rates.
Seagate Technology gained 2.3 percent after investor ValueAct disclosed that it had acquired a 7.2 percent stake in the digital storage company.
Among economic data, the U.S. Labor Department is likely to report that initial jobless claims remained unchanged at 240,000 for the week ended August 5.
The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.
USA crude was down 0.9 percent at $48.16 per barrel, on track for a weekly loss of 2.9 percent.