Stock markets around the world were under pressure on Wednesday amid increased tensions between the USA and North Korea following comments from President Donald Trump, and big entertainment stocks were among the many decliners.
Currency traders consolidated positions in the Japanese yen and Swiss franc, and nudged up the dollar index by unwinding some of the recent big bets on the euro.
With the rhetoric rumbling on, Europe's top-rated German bond yield held near six-week lows.
At close USA stocks' retreat was mild as Dow and S&P 500 barely changed.
The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe .MIWD00000PUS lost 1.1 percent in its third straight day of declines, as it pulled further back from all-time highs. It was the benchmark's worst percentage drop since a 1.8 % decline on that same day in May.
Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday his statement might not have been "tough enough". North Korea also laid out detailed plans of how it would launch a missile strike on USA military bases in Guam.
"We saw a tentative recovery in risk appetite yesterday from the sell off inspired by North Korea but I think justifiably that move is fading a little bit today", said Saxo Bank's head of FX strategy John Hardy.
USA gold futures for December delivery rose 0.3 percent to $1,294.10 per ounce.
Investors' unease over escalating tensions between the USA and North Korea had weighed on stocks earlier in the day, pushing gold and bond prices slightly higher.
Asian stocks are mostly lower as investors ponder escalating tensions over North Korea's nuclear ambitions. "The typical textbook trade is that investors rush for safe haven, hence we have experienced a bounce for the gold price". The S&P 500 index dropped 35.81 points to 2,438.21, while the Nasdaq composite index slid 135.46 points to 6,216.87.
"Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist, at Scotiabank in Toronto. The contract fell 97 cents, or 2 percent, to close at $48.59 a barrel on Thursday.
The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a vehicle hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%.
Tokyo's Nikkei 225 share index closed down 1.3% at its lowest since June 1 as the strong yen hit exporters, while South Korea's KOSPI index fell 1.1% to seven-week lows.