USA stocks indexes were higher in afternoon trading on Friday, on track to snap a three-day losing streak, as tepid inflation data brought back investors to riskier assets, despite heightened tensions between the United States and North Korea.
"The market is trying to interpret the CPI data as somewhat positive because it is anticipating that the Fed will be on hold not only in September but also possibly in December", said Robert Pavlik, chief market strategist at Boston Private Wealth.
Japanese markets were closed for a holiday but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the USA presidential election in November.
The Swiss franc and the Japanese yen are often sought in times of geopolitical tension and have logged big gains against the dollar this week after U.S. President Donald Trump warned North Korea that it would face "fire and fury" if it threatened the United States.
"There's not a great incentive to buy big", said Lerner of SunTrust Advisory.
At 12:43 p.m. ET (1643 GMT), the Dow Jones Industrial Average was up 49.69 points, or 0.23 percent, at 21,893.7 and the S&P 500 was up 6.84 points, or 0.28 percent, at 2,445.05.
"I will tell you this, North Korea better get their act together or they're going to be in trouble like few nations ever have been in trouble in this world", Trump said. The Russell 2000 index of smaller-company stocks picked up 1.69 points, or 0.1 percent, to 1,374.23. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.
Shares of Snap were down as much as 14.23 percent and hit an all-time low following a miss on revenue and daily active users.
South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent.
"Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.
Gains among technology companies helped snap a three-day losing streak for US stocks Friday, though the market ended with its worst weekly loss since March.
But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen.
London's benchmark FTSE 100 index fell back 1.3 percent, driven by losses in the commodity sector.
"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.
The latter continued to be dragged down by a stronger euro and Japanese yen, while the former were shedding some of the impressive safe-haven demand that accumulated this week.
By the end of the day almost $1 trillion in equity had been lost globally.
Investors also drew some encouragement from new government data showing US inflation at the consumer level inched higher last month.
"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", TD Securities said in a research note.
The 30-year bond last rose 6/32 in price to yield 2.7847 percent, from 2.794 percent late on Thursday.
After touching a more than two-month high at US$1,291.86, spot gold last added 0.2 per cent to US$1,288.81 an ounce.
Japanese markets were closed for a holiday but the yen powered on, hitting an eight-week high of 108.91 yen to the dollar, adding to its biggest weekly gain since May.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories. Brent crude, used to price global oils, rose 20 cents to $52.10 a barrel in London.