The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the US presidential election on Thursday, but was down 1.22 points at 14.82 points on Friday.
Investors instead turned to safe-haven assets such as gold, pushing it to a two-month high, and the Japanese yen rose. Meanwhile, euro/dollar was 0.2% up, just shy of the 1.18 handle, pound/dollar was flat, having earlier hit a three-week low of 1.2939 and dollar/yen was 0.1% down above the 109 level - the pair fell to 108.72 after the data on US CPI, its lowest since April 20.
"If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said.
The primary indicator of the week, consumer prices have slightly advanced in the month of July in the United States, but less than expected, according to figures released Friday by the ministry of Labour. The Russell 2000 index of smaller-company stocks gave up 13.20 points, or 0.9 percent, to 1,396.95. Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S.is the first mover.
Materials, home to gold producers and other resource-based companies, was the only gainer among the index's 10 main sectors and was up 0.6 percent.
Mr Trump's comments also sparked a late afternoon selling on Tuesday, with the Dow ending a nine-day streak of closing records.
The Labour Department said that its Consumer Price Index inched up 0.1% last month, pointing to subdued inflation which could make Federal Reserve policy makers cautious regarding another interest rate hike in 2017.
"The market had been complacent for a while regarding headlines from North Korea".
The Dow Jones Industrial Average closed down 204.69 points, or 0.93 per cent, at 21,844.01, the S&P 500 lost 35.81 points, or 1.45 per cent, to end the session at 2,438.21 and the Nasdaq Composite fell 135.46 points, or 2.13 per cent, to 6,216.87.
The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. The S&P has lost more than 1 percent on only three days this year.
Latest holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell a slight 0.03 per cent to 786.87 tonnes on Monday, the lowest since March 2016.
Germany's DAX dropped 0.3 per cent to 12,117.07 and the CAC 40 of France lost 0.3 per cent to 5,132.22.
Bond prices were little changed.
Traders snapped up shares in companies that delivered strong quarterly results.
The yield on the benchmark 10-year U.S. Treasury note fell to 2.255 percent from its U.S. close of 2.282 percent on Tuesday.