U.S. stock indexes opened higher for the first time in four days on Friday after tepid data pointed to benign inflation that could make the Federal Reserve cautious about raising rates again this year, even as concerns lingered over rising tensions between the United States and North Korea.
"It looks like a technical correction, but if there's more bad news in the days to come, or if geopolitical tensions escalate, this short-term correction could become a major correction for stock markets here and globally", CMC Markets analyst Margaret Yang said.
Global markets have been on edge since Tuesday, when President Donald Trump warned North Korea of severe retribution should the authoritarian state proceed with any more missile tests or threats.
The Standard & Poor's 500 index fell 19 points, or 0.8 per cent, to 2,454 as of 11:15 a.m.
More than 430 stocks from all USA exchanges hit their lowest levels in 52 weeks or more on Thursday, the most for any session since mid-November right after Trump was elected.
Investors are increasingly nervous: The VIX volatility index, a closely-watched "fear gauge", is up 70% since Tuesday.
The strength on Wall Street is partly due to bargain hunting, with traders picking up stocks at reduced levels following the pullback seen over the past few sessions. Core prices had also been expected to climb by 0.2 percent.
The last time the S&P closed down more than 1 per cent was May 17 when it fell 1.8 per cent.
Most large-cap stocks fell across the board.
Losses at the Snapchat parent ballooned to $443 million in the second quarter, a almost fourfold increase from the same period a year ago. Macy's sank 10.3 per cent and Kohl's lost 5.8 per cent.
Heading into Thursday, some 89 percent of the companies in the S&P 500 had reported quarterly results. Yields fall when bond prices rise. The stock fell 76 cents to $5.48.
The Federal Reserve's hint about unwinding balance sheets, the possibility of the European Central Bank tapering stimulus and the looming debate about the US debt ceiling in the fall challenge the market's recent performance, Mr. Baele said. Germany's DAX Index fell 0.6%, the UK's FTSE 100 Index retreated 1.2% and France's CAC 40 Index slid 1.4%.
The yield on USA 10-year Treasurys slid to 2.199% Friday from 2.211% Thursday.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in July, matching the increases seen in the three previous months.
CURRENCIES: The dollar slipped to 109.35 yen from 109.85 late Wednesday.
The Dow slid as declines in Apple and Goldman Sachs, down 2.3% and 1.7% respectively, outweighed gains in McDonald's and Coca-Cola, up 1.4% and 0.5% respectively.
MARKETS OVERSEAS: Major indexes in Europe were headed lower.