President Trump says North Korea has "disrespected our country greatly", adding his "fire & fury" warning "wasn't tough enough".
Wall Street got off on a downbeat start early Thursday as tensions between the US and North Korea continued to escalate, rattling markets overseas.
United States stocks ended lower on Thursday, and Asian markets fell sharply, with Hong Kong's Hang Seng index dropping 2%.
The focus on North Korea largely overshadowed a Labor Department report showing an unexpected drop in U.S. producer prices in the month of July.
The dollar index, which gauges the greenback against the currencies of six major U.S. trading partners, was last 0.2% down on the day during afternoon European trading hours - it stood at 93.20.
The Dow Jones Industrial Average .DJI fell 204.69 points, or 0.93 percent, to close at 21,844.01, the S&P 500 .SPX lost 35.81 points, or 1.45 percent, to 2,438.21 and the Nasdaq Composite .IXIC dropped 135.46 points, or 2.13 percent, to 6,216.87.
North Korea raised the stakes further on Thursday with a detailed plan to send a salvo of missiles towards the US Pacific territory of Guam. Platinum also moved up 0.8% to $979.85, while palladium moved up a percentage point to $900.30.
The CBOE Volatility Index - a measure of investors' expectations for swings in the S&P 500 over the next 30 days - surged Thursday to its highest level since U.S. Election Day.
Arsenal To Make Alexis Sanchez Premier League's Highest-paid Player
Wenger also dismissed Chelsea's reported interest in Alex Oxlade-Chamberlain, saying he is still firmly in his first-team plans. For us Alexis Sanchez is a loss, of course. "But all the other players prepared in preseason and are ready", Wenger said.
"It's been a bit of a roller coaster this week, with all the rhetoric between the U.S. and North Korea", said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management.
BAD TRIPS: Priceline Group slid 8.2 percent after the online travel booking service issued a profit forecast that was weaker than analysts were expecting.
In Australia mining stocks also benefitted from the strength of gold.
Analysts warned the softening dollar could test June's low of 108.82 yen and even the 2017 trough of 108.13 yen.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in July, matching the increases seen in the three previous months.
Shares of Kohl's were down 2.05 percent in premarket trading, while Macy's fell 0.91 percent after the department store operators reported a fall in sales. Randgold Resources Ltd. and Barrick Gold Corp. were among the best performers, each gaining more than 1.4 percent. The euro slid to $1.1732 from $1.1752.
BONDS: Bond prices rose.
Several indexes closed lower overnight. The yield on three-year Treasurys fell 2.0 basis points to 1.804 percent and the return on benchmark five-year government bonds shed 2.0 basis points to 2.004 percent.