North American markets fell Friday for a second day of broad declines as fears continued about the potential fallout of a trade dispute between the U.S. and China.

Tensions escalated as China hinted at tariffs on a U$3 billion list of U.S. goods including pork and apples in retaliation for steel and aluminum tariffs announced by the U.S. President Donald Trump earlier this month.

The trade dispute between the world's two largest economies could destabilize the widespread growth happening globally, said Luciano Orengo, Portfolio Manager, Manulife Asset Management Ltd.

"The fear here is that this trade war will expand out of control, and basically start putting some braking forces in world GDP growth. Then what that does is have a negative impact on commodity prices."

Those fears helped push the S&P/TSX composite index to close down 176.19 points to 15,223.74, led by declines in base metals. For the week the index was down 3.1 per cent.

In New York, the S&P 500 index was down 55.43 points to 2,588.26, ending the week down six per cent for its worst showing since January 2016.

The Dow Jones industrial average closed down 424.69 points to 23,533.20. The S&P 500 index was down 55.43 points to 2,588.26 and the Nasdaq composite index was down 174.01 points to 6,992.67.

The Canadian dollar closed at 77.78 cents US, up 0.31 of a US cent following the latest reading on inflation in Canada. Statistics Canada says the annual pace of inflation sped up to 2.2 per cent last month for its fastest pace in more than three years.

The inflation figures, higher than the expected 1.9 per cent, played a role in the climb, but rising oil prices likely boosted the Canadian dollar more, said Orengo.

The May crude contract was up $1.58 cents to US$65.88 per barrel because inventories have been trending down, but also because of U.S. political movements, he said.

"Inventories have been trending down for oil, but I think the main reason today is Trump's naming John Bolton as new national security adviser."

Bolton has had hawkish attitudes in the past and been critical of a U.S.-led nuclear deal with Iran, said Orengo, creating concerns of future supply reliability from the country.

"Iran being a fairly large producer of oil, that's sort of giving a bid for oil."

The increased geopolitical tensions also gave gold prices a boost, as investors look to safe assets. The April gold contract up US$22.50 to US$1,349.90 an ounce, helping push gold stocks to one of the few sectors with gains on the TSX Friday.

The May natural gas contract was down two cents to US$2.63 per mmBTU, and the May copper contract was down three cents to US$2.99 a pound.