The pan-European FTSEurofirst 300 index .FTEU3 lost 1.19 percent. South Korea's KOSPI fell 1.8 percent to almost a three-month low.
Earlier, Trump warned North Korea on Tuesday it would face "fire and fury" if it threatens the United States, prompting the nuclear-armed nation to say it was considering firing missiles at Guam, a US -held Pacific island.
In New York, the Dow Jones industrial average plunged 204.69 points to 21,844.01, while the S&P 500 index dropped 35.81 points to 2,438.21 and the Nasdaq composite index slid 135.46 points to 6,216.87.
Overseas, European markets were trading lower by noon on the continent, while the Nikkei 225 in Japan doffed 0.1%, and Shanghai's CSI 300 fell 0.4%.
However, market watchers said equity markets remained focused on the deepening geopolitical crisis, as angry threats from Washington and Pyongyang stoke fears of a catastrophic miscalculation with global consequences.
"Of course it's all come at a time when share markets are due for a correction, so North Korea has provided a flawless trigger", he added. Meanwhile, the dollar USDJPY, -0.31% fetched ¥109.69, compared with ¥110.31 late Tuesday.
"We should also consider the upcoming election, which is now looking to be a very tight race".
"The story today is North Korea and there was nothing in the earnings that was bullish enough to pull people away from focusing on North Korea", said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
The spot gold price was up 0.7 percent at $1,286.07 per ounce by 1400 GMT, after hitting an earlier high of $1,286.40, its highest level since June 8.
Asian stocks slump on profit-taking after US-NKorea tensions
The euro edged down 0.1 percent to $1.1735.
The greenback also came under pressure after New YorkFederal Reserve President William Dudley cautioned it would "take some time" for USA inflation to reach the bank's two percent target, the latest warning price pressures remain muted. Macy's sank 10.3 percent and Kohl's lost 5.8 percent.
The euro eased 0.1 per cent to $1.1766, staying below a high of around $1.1910 set last week, the euro's strongest level in 2-1/2 years.
The Nasdaq, Wall Street's home to many high profile tech companies, finished the day down more than 2%.
Head of commodity strategy at Saxo Bank, Ole Hansen, told Reuters he sees further rises for gold, albeit under a ceiling: "The market hates uncertainty and that's certainly what we have now".
Benchmark U.S. 10-year notes last rose 6/32 in price to yield 2.1905 percent, from 2.211 percent late on Thursday.
"The market had been complacent for a while regarding headlines from North Korea". Brent crude, used to price worldwide oils, declined 23 cents to $51.67 per barrel in London.
The euro dipped 0.1 per cent to $1.1733 but the single European currency has been slipping this week against the dollar, having hit a more than 2 1/2-year high of $1.1892 on August 2. Humana rose $4.74, or 1.9 percent, to $254.96.
Arsenal's Sanchez out of opener due to abdominal strain
The Sky Sports app, available to download on iOS and Android devices, will also be providing live text coverage and updates. Former Manchester United striker Javier Hernandez returns to the Premier League after spells in Spain and Germany.
N.Korea Snubs S.Korea at ASEAN Forum
In the context of North Korea's rapidly advancing intercontinental ballistic missile program, these threats can not be ignored. Tillerson conceded there would likely be a lag period before the sanctions "actually have a practical bite on their revenues".
Raises Position in Liberty Media Corporation (LSXMA)
Finally, River Road Asset Management LLC raised its stake in Liberty Interactive Corporation by 25.3% in the first quarter. Zacks' EPS averages are a mean average based on a survey of sell-side analysts that follow Liberty Media Corporation.
Rio Tinto's first-half profit jumps 93 per cent to $4.1b
Shareholder returns amount to around 75 per cent of underlying earnings in the first half of the year, the company said. Finally, Capstone Asset Management Co. raised its stake in shares of Rio Tinto PLC by 2.3% in the first quarter.