Weaker-than-expected consumer price data for last month led investors to bet that benign inflation would keep the US Federal Reserve from raising rates again this year.
The indicated USA market moves reflect a selloff across global stock markets Friday. -North Korean tensions have eased somewhat due to diplomatic activity.
Hong Kong's Hang Seng index jumped 1.4 percent to 27,250.23 and Australia's S&P ASX 200 surged 0.7 percent to 5,730.40.
"There are four more (inflation) prints between now and the December FOMC meeting and we expect the Fed to remain data-dependent, if a touch more cautious", said TD Securities in a research note.
Trump continued the back-and-forth with a post on Twitter this morning indicating that the USA is prepared to take military action against North Korea.
USA stocks rallied on Monday, Aug. 14, as investors looked beyond a standoff with North Korea and rediscovered their appetite for riskier assets.
The USD/JPY changed hands at 108.94, down 0.23 percent.
Damage for the week: The days of verbal sparring between Washington and Pyongyang looks set to bruise weekly performances for the major US indexes.
Industrials rose 1.2 per cent, with the country's biggest rail operator, Canadian National Railway rising 1.4 per cent to $102.26.
Despite the gains on the day, the major averages moved lower for the week. Shares of Macy's lost 10% and Kohl's fell 5.8%.
"All is relatively calm, all is relatively quiet on the geopolitical front and long may that last", said Kit Juckes, a global strategist at Societe Generale.
"U.S. tech is a case in point".
According to the Labor Department on Friday, inflation was largely stagnant in July. Eastern Time, alongside core CPI.
Such an outcome would normally boost the US dollar, Spivak said in a note.
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.
Stock movers: Shares of Snapchat parent Snap Inc.(SNAP) slid 14% in premarket trading.
The Nikkei's fall was partly reflecting a catch up effect as last Friday was a holiday, pointed out Jim Reid at Deutsche Bank, who also noted that the bank's Japanese economist believes the second quarter trend "appears too good to be sustained, partly as major leading indicators of investment appear to have already peaked". Apple is still up 35% for 2017 and hovers near a record high.
J.C. Penney Co finished down 16.6 percent after hitting a record low following the retailer's bigger-than-expected quarterly loss.
The US-North Korea spat that allowed safe havens to rally this week continued during today's European session.