"With European, U.S. and Asian markets all suffering heavily in anticipation of a potential conflict in Asia, it is worthwhile noting that we have heard similar posturing between Trump and Kim Jong Un before", said Mahony.
Australian stock futures slumped early on Friday and other Asian markets looked set to follow as tensions ramped up between the U.S. and North Korea, sending investors into less risky assets such as gold, the yen and USA government bonds.
Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday that statement might not have been "tough enough".
South Korea's Kospi fell 1.8% to an 11-and-a-half-week low, taking its losses this week to 3.2%.
The Australian dollar, which rose to a 19-month high near 90.00 yen late in July, was down 0.6 per cent at 86.77 yen after slipping to a one-month low of 86.23 yen.
Japan is the world's biggest creditor country and there is an assumption that investors there will repatriate funds in a crisis.
"If the market truly believed the North Korea reaction was imminent, I think it would be down a lot more than it is", said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
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Valeant's stock, which rallied a day before following quarterly results, sank 9.6 percent to C$17.85 after it said its subsidiaries in Australia were the subject of a tax audit. A gauge of volatility on the S&P 500, the VIX hit its highest reading for over a month.
On the currency front, the USA dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday.
The rhetoric between the USA and North Korea has continued to heat up, leading traders to look to safe havens such as gold and treasuries.
Bond prices came under pressure early in the session and remained stuck in the red throughout the day.
The recent resilience of data on the United States economy has not dampened the latest climb, despite depressing prices earlier in the week as reports returned high employment figures ahead of further USA inflation information this week.
Computer hardware stocks rebounded following recent weakness, with the NYSE Arca Computer Hardware Index climbing by 1.4 percent.
The bombing of Pearl Harbor, for instance, resulted in a 3.8 percent drop in the S&P 500 on December 7, 1941. It soared over 2 percent in the previous two sessions, and is set for a weekly gain of 2.25 percent.
But Michael said the overall market was still expected to saw-tooth its way higher due in part to a batch of better-than-expected earnings and low interest rates, despite the shift toward raising rates.
A report released by the Labor Department showed a modest uptick in consumer prices in the U.S. in the month of July. Crude futures extended losses on the fear of slowing demand and lingering concern over a global oversupply.