Global oil and gold prices shot higher Friday as worries mounted about the conflict in the Middle East widening.
The tensions overshadowed the start of US corporate earnings season, with Wall Street stocks sliding despite banks beating expectations.
"Geopolitical worries have triggered some risk aversion, but worries about a growth slowdown have presumably triggered some residual angst about corporate earnings not living up to expectations," said Briefing.com analyst Patrick O'Hare.
Oil prices were up more than two percent as regional tensions soared after Iran threatened reprisals over a strike in Syria this month that killed two Iranian generals.
Gold also benefitted from its status as a haven investment, breaking the $2,400 per ounce level to set a fresh record.
"US stocks are falling, and gold is rising in risk-off trade as fears rise that the Israel-Hamas war could escalate if Iran directly attacks Israel, which could happen this weekend," said Fiona Cincotta at City Index.
Investor attention had been set to focus on Friday's start of the corporate earnings season after economic data released earlier this week largely killed off the possibility that the US Federal Reserve could begin cutting interest rates in June.
Equity markets took the recalibration of expectations of interest rate cuts in stride as data showing the US economy in strong health raised hopes that companies will keep reporting strong earnings.
At the start of the year markets had priced in six interest cuts by the Fed in 2024, but now expect only two.
JPMorgan Chase, Wells Fargo and Citigroup all reported Friday better-than-expected earnings results for the first quarter.
But their shares fell, with those in JPMorgan Chase slumping more than five percent in late morning trading.
Wall Street's main indices fell at the opening bell.
Eurozone stock markets had spent much of Friday higher after the European Central Bank signaled Thursday a likely June interest rate cut, but gave up their gains as Middle East tensions rose.
London stocks fizzed higher, approaching a record intra-day high, on data showing the UK economy grew for a second straight month in February, further fuelling recovery hopes after sliding into a shallow recession in the second half of last year.
Dimming hopes for US rate cuts continued to support the dollar, which surged to another 34-year high above 153 yen, putting Japanese officials in the spotlight after they said they were ready to intervene in markets to support their currency.
Key figures around 1530 GMT
New York - Dow: DOWN 0.8 percent at 38,140.68 points
New York - S&P 500: DOWN 0.9 percent at 5,151.66
New York - Nasdaq Composite: DOWN 1.1 percent at 16,264.60
London - FTSE 100: UP 0.9 percent at 7,995.58 (close)
Paris - CAC 40: DOWN 0.2 percent at 8,010.83 (close)
Frankfurt - DAX: DOWN 0.1 percent at 17,930.32 (close)
EURO STOXX 50: DOWN 0.4 percent at 4,948.38 (close)
Tokyo - Nikkei 225: UP 0.2 percent at 39,523.55 (close)
Hong Kong - Hang Seng Index: DOWN 2.2 percent at 16,721.69 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,019.47 (close)
Dollar/yen: DOWN at 153.07 yen from 153.27 yen on Thursday
Euro/dollar: DOWN at $1.0641 from $1.0726
Pound/dollar: DOWN at $1.2449 from $1.2553
Euro/pound: UP at 85.47 pence from 85.44 pence
Brent North Sea Crude: UP 2.0 percent at $91.54 per barrel
West Texas Intermediate: UP 2.3 percent at $86.95 per barrel