U.S. Defense Secretary issues stark warning to North Korea

U.S. Defense Secretary Jim Mattis issued a stark warning to North Korea on Wednesday, telling Pyongyang that it should stop any actions that would lead to the "end of its regime and the destruction of its people."

Mattis' words, some of the strongest he has issued on North Korea, followed incendiary comments from President Donald Trump who said on Tuesday that threats to the United States from Pyongyang would be met with "fire and fury."

Trump's unexpected remarks prompted North Korea to respond by saying it was considering plans for a missile strike on the U.S. Pacific territory of Guam.

Mattis said in a statement that the United States and its allies would win any arms race or conflict with North Korea.

"The DPRK must choose to stop isolating itself and stand down its pursuit of nuclear weapons," Mattis said, using the acronym for North Korea's official name, the Democratic People's Republic of Korea. "The DPRK should cease any consideration of actions that would lead to the end of its regime and the destruction of its people," he added.

On global markets, the strong rhetoric and sharp increase in tensions drove investors out of stocks and other risky assets on Wednesday and into textbook safe havens like gold and Treasuries.

The United States and South Korea remain technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

Tension in the region has risen since North Korea carried out two nuclear bomb tests last year and two intercontinental ballistic missile tests in July. Trump has said he will not allow Pyongyang to develop a nuclear weapon capable of hitting the United States.

On Wednesday, Trump followed up his "fire and fury" warning with a boast about U.S. nuclear capabilities.

"My first order as President was to renovate and modernize our nuclear arsenal. It is now far stronger and more powerful than ever before," Trump tweeted. "Hopefully we will never have to use this power, but there will never be a time that we are not the most powerful nation in the world!"

Trump’s "fire and fury" remarks prompted warnings from U.S. officials and analysts not to engage in rhetorical slanging matches with Pyongyang.