Nervous investors drove shares lower earlier in the week, after President Trump declared Tuesday that the US would react with "fire and fury" to further nuclear provocations from North Korea.
U.S. stocks have risen week after week this year - with the S&P up more than 9 percent - in extremely low volatility, as strong corporate earnings and an improving global economy offset disappointment that U.S. President Donald Trump's promises to lower corporate taxes and implement a massive infrastructure spending have so far failed to see the light of day. Still, he said, "the Washington, D.C., bedlam and North Korea's saber-rattling is muddying the broader landscape".
US stock-index benchmarks opened slightly higher on Friday, but equities were on pace for its ugliest week in months amid intensifying rhetoric between the USA and North Korea.
Manulife Financial Corp was down 1.1 percent to C$25.64.
All three major stock indexes dropped 0.2 per cent at the close, with the Dow Jones Industrial Average finishing at 22,085.34, halting a almost two-week run of closing records.
Positive sentiment was also generated by a report from the Labor Department showing a modest uptick in consumer prices in the month of July. The Dow is up 34.62 points or 0.2% at 21,878.63, the Nasdaq is up 25.62 points or 0.4% at 6,242.49 and the S&P 500 is up 4.36 points or 0.2% at 2,442.57.
Major indexes in Europe closed mostly lower.
Mr Trump warned Kim Jong Un earlier this week that his country faced "fire and fury".
Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, said: "While the tough talk about the potential for war (between the United States and North Korea) is scary, investors have heard it many times before".
The benchmark USA yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor. Germany's DAX Index fell 0.6 percent, while the UK's FTSE 100 Index retreated 1.2 percent, and France's CAC 40 Index slid 1.4 percent.
The S&P 500 volatility index, a measure of investor fear, rose for a second day. Shares of Manulife, which reported better-than-expected results, fell after the company played down talk of a John Hancock spin-off. The Dow closed up 0.05% and the Nasdaq was up 0.64%. Brent crude, the worldwide standard, lost 23 cents to 52.14 dollars a barrel in London.
Priceline sank 6.9 per cent as it projected third-quarter earnings below analyst expectations.
CURRENCY: The dollar declined to 109.79 yen from Tuesday's 110.34 yen.
ENERGY: Benchmark U.S. crude lost 23 cents to $48.94 per barrel in electronic trading on the New York Mercantile Exchange. The euro rose to $1.1812 from $1.1774.