European stocks fell sharply for the second consecutive session Friday, while Wall Street futures lurched lower, as investors retreat from global stocks amid rapidly increasing concern that the current crisis in North Korea could escalate into military action.

The region-wide Stoxx Europe 600 index, the broadest measure of share prices, was marked 1.1% lower in the opening 90 minutes of trading and changing hands at 371.89, the lowest level since March 9. Britain's FTSE 100 tumbled 1%, extending its weekly decline past 2.5% as oil majors and basic materials stocks slumped on falling commodity prices in China. Markets in Germany and France were also under pressure, with the DAX performance index in Frankfurt falling 0.6% to its lowest level since mid-March. 

Early indications from U.S. equity futures suggest a third session of losses on Wall Street, with the S&P 500 slated to dip a further 0.2% following Thursday's 35.8 point fall, the biggest single-day decline since May 17. The Dow Jones Industrial Average, which shed more than 200 points yesterday, is priced to fall a further 25 points at the opening bell while the tech-focused Nasdaq is looking at a 19-point, or 0.2%, decline. 

U.S. President Donald Trump's warning Thursday that his earlier "fire and fury" threat is "not a dare, it's a statement" rattled global investors and pulled Wall Street sharply lower. It also helped lift U.S. market volatility, in the form of the CBOE's 'VIX' index, to its highest level since Nov. 8 during U.S. trading.

"He's not going to go around threatening Guam. And he's not going to threaten the United States. And he's not going to threaten Japan. And he's not going to threaten South Korea," Trump said. "Let's see what he does with Guam. He does something in Guam, it will be an event the likes of which nobody's seen before, what will happen in North Korea."

Stocks on South Korea's benchmark KOSPI Composite were also hit, falling 1.85% to extend the 5-day decline past 3.4% while the MSCI Asia ex-Japan index, the regional benchmark, was marked 1.6% lower into the start of European trading as shares took the brunt of investor bearishness owning to the closure of markets in Japan for a national holiday.

The didn't stop the yen from rising to an 8-week high against the U.S. dollar as investors fled risky assets around the world, but largely shunned the greenback, which kept the dollar index pinned to its 15-month lows at 93.73. Gold prices were largely unchanged at $1,285 an ounce while benchmark U.S. 10-year Treasury note yields were stuck at a 6-week low of 2.20%.

Global oil prices extended declines Friday after the International Energy Agency boosted its demand forecast but noted that some OPEC members are "weakening resolve" in maintaining production cuts.

In its regular Monthly Oil Market Report, The Paris-based IEA said global oil demand should rise by 1.5 million barrels a day, up from the 1.4 million increase it forecast last month, and that increased consumption should help "re-balance" markets around the world, noting that "producers should find encouragement from demand, which is growing year-on-year more strongly than first thought"

However, the Paris-based group said there would be "more confidence that rebalancing is here to stay if some producers party to the output agreements were not, just as they are gaining the upper hand, showing signs of weakening their resolve."

West Texas Intermediate crude futures for September delivery slipped lower following the IEA report, extending declines to 1.1% to around $48.02 per barrel by 09:30 London time. Brent contracts for October, the global benchmark, were marked 1% lower at $51.35.

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