European and US stocks retreated Thursday, the final trading day of the holiday-shortened week, as the US military dropped a massive bomb in Afghanistan targeting an Islamic State complex, adding to geopolitical worries.

Investors were in a cautious mood even before the Pentagon's move, owing to worries about Syria and North Korea, as well as the outcome of the French presidential election.

The Massive Ordnance Air Blast bomb -- better known by its nickname, the "Mother of All Bombs" -- hit a tunnel complex in Achin district in Nangarhar province, US Forces Afghanistan said in a statement.

US equities accelerated their losses late in the afternoon, following news of the bomb, with the S&P 500 finishing at session lows, down 0.7 percent. Earlier in the day, markets in Paris, London and Frankfurt all fell.

"People are saying 'Let's take some risk off the table,'" said JJ Kinahan, chief market strategist at TD Ameritrade. "With what's going on in geopolitics, who knows what can happen" over the long weekend.

European markets London, Frankfurt and Paris will not reopen until Tuesday, while Wall Street will not trade on Friday.

- Dollar regains momentum -

The dollar regained its footing after tumbling on Wednesday following Trump comments Wednesday saying the US currency was too strong and that he preferred low interest rates.

But the dollar reversed those moves on Thursday.

"People are sort of looking at what Mr. Trump said and saying 'We understand Mr. Trump's point of view but what is going to be the actual sort of policy implemented to reflect the issues the president raises?'" said Nick Bennenbroek, head for currency strategy at Wells Fargo Securities.

Among US companies, petroleum-linked shares were big losers in an apparent round of profit taking following gains earlier in the week. Dow members ExxonMobil and Chevron lost 1.5 percent and 2.6 percent, respectively, while Halliburton slid 1.9 percent.

Wells Fargo slumped 3.3 percent after reporting flat earnings that missed analyst expectations amid the continued effects of the bank's fake accounts scandal

Tesla Motors gained 2.4 percent after chief executive Elon Musk said the electric car startup was set to launch its first semi-truck in September, moving for the first time into that segment.

- Key figures at 2100 GMT -

New York - Dow: DOWN 0.7 percent at 20,453.25 (close)

New York - S&P 500: DOWN 0.7 percent at 2,328.95 (close)

New York - Nasdaq: DOWN 0.5 percent at 5,805.15 (close)

London - FTSE 100: DOWN 0.3 percent at 7,327.59 (close)

Frankfurt - DAX 30: DOWN 0.4 percent at 12,109.00 (close)

Paris - CAC 40: DOWN 0.6 percent at 5,071.10 (close)

EURO STOXX 50: DOWN 0.6 percent at 3,447.32

Tokyo - Nikkei 225: DOWN 0.7 percent at 18,426.84 (close)

Hong Kong - Hang Seng: DOWN 0.2 percent at 24,261.66 (close)

Shanghai - Composite: UP less than 0.1 percent at 3,275.96 (close)

Euro/dollar: DOWN at $1.0613 from $1.0671 at

Pound/dollar: DOWN at $1.2503 from $1.2544

Dollar/yen: UP at 109.14 yen from 109.07

Oil - West Texas Intermediate: DOWN 7 cents at $53.04 per barrel

Oil - Brent North Sea: DOWN 20 cents at $55.86

source: AFP