"We likely will continue to see more tension in the region (Korean Peninsula)", Meir noted.
A small rise in a measure of US consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favorable to equity investors.
The DAX of Germany dropped 1.12 percent and the CAC 40 of France fell 1.40 percent. Stocks in Taiwan, Singapore and other Southeast Asian countries were also lower. With the sell-off on the day, the Nasdaq and the S&P 500 fell to their lowest closing levels in a month.
"European shares are trading once again lower. continuing their slide on the back of ever more increasing tensions between North Korea and the U.S.", added analyst Markus Huber at City of London Markets. The FTSE 100 of the United Kingdom declined 0.59 percent and the SMI of Switzerland finished lower by 1.48 percent.
The Swiss franc has gained about 1.3 percent against the dollar so far this week, while the yen has advanced around 1.5 percent in the same period. Small-company stocks fell more than the rest of the market.
The yen on Friday added to a strong weekly rally against the dollar of close to 1.5 percent, hitting its highest versus the greenback in nearly four months, at 108.73 yen. The precious metal is often seen as a safe haven for investors during times of uncertainty.
Subdued U.S. inflation has stirred doubts about the chances of another Fed interest rate hike this year, which have weighed on the dollar.
And several high-profile investors like Ray Dalio and Jeff Gundlach offered buzzkills by suggesting that the second-longest bull market in history at least needs to take a breather.
Christy Clark resigns as Liberal Party leader
After her government's ousting, Clark tried unsuccessfully to dissolve the legislature, which would have triggered a new election. Clark on Friday, but the party will now face the necessity of picking a new leader to face the BC NDP government.
Sterling was last trading at $1.3007, up 0.25 percent on the day.
Disney dropped 3.9 percent after reporting a weak quarter and saying it would pull its movies from Netflix and start its own video streaming services.
Commodity bloc currencies are typically sensitive to swings in market mood and proved to be so against, with the Australian Dollar leading the way lower having been stung by disappointing consumer confidence data.
The dollar was testing the 109 yen barrier in morning forex trade, while gold, another classic safe haven asset, was trading at around $1,285 per ounce, up more than two percent this week. We can expect that data a 11.30am.
The 30-year bond was last up 4/32 in price to yield 2.7871 percent, from 2.794 percent late on Thursday.
Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.
"The fact that both European currencies have not been hit harder by the U.S./ North Korea situation, indicates that there is substantial fundamental backing behind them".
Despite its recent weakening, the New Zealand dollar is still up more than 5 percent this year, setting a 26-month high of $0.7557 in July.