In Europe, the Stoxx Europe 600 Index fell 0.4 per cent, paring a weekly gain to 1.1 per cent, while The MSCI All-Country World Index fell 1.2 per cent.
"The market has vacillated between writing it off as just talk and assuming there could be a serious problem", said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey. The Dow dropped 2.3 percent Friday and is down 0.7 percent for the week.
Trump late Thursday threatened to slap $100 billion more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a "fierce counter strike".
"The process itself seems to be quite chaotic", she said.
In a radio interview Friday morning, Trump said, "I'm not saying there won't be a little pain, but the market has gone up 40 percent, 42 percent, so we might lose a little bit of it".
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A game that looked in danger of drifting towards a stalemate sparked into life after half-time with two goals in four minutes. Real Madrid is now third with 63 points, while the Rojiblancos are second with 67 points, behind the leaders, FC Barcelona .
"These potential trade wars are not good for the market", said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. We were badly represented. Only two of the most active USA stocks premarket were higher.
Mnuchin said he was hopeful that negotiations with his Chinese counterparts could avert a damaging escalation of retaliatory, tit-for-tat tariffs but declined to elaborate on the status of talks and whether he thought an agreement could be reached. The decline took the benchmark index within striking distance of its 200-day moving average, a closely watched technical level that is often used to gauge the long-term momentum in an asset's price.
"I feel like this is a typical reaction, but I think that it will come back around", said Zach Holt. Caterpillar fell 3.5 percent. ProShares S&P 500 Ex-Energy ETF has a 1 year low of $44.29 and a 1 year high of $59.30. Still, Pride said all of the proposed tariffs add up to a pretty small fraction of trade between the US and China, and overall, they wouldn't affect the nation's economy that much if they do go into effect.
Craig Holke, investment strategy analyst for the Wells Fargo Investment Institute, said the market will continue to bounce around as investors worry about changes in trade that could slow down the global economy and company profits.
Around two-thirds of the time, the descending triangle patterns result in lower prices.