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Global stock markets have dropped amid alarm over rising tensions between Washington and Moscow over Ukraine.

In New York, the Dow Jones dropped 1.8%, the S&P 500 slid by more than 2% and the Nasdaq closed nearly 3% lower.

The falls came after US President Joe Biden accused Russia of looking for excuses for an invasion, which he said could happen in days.

In Asia trade on Friday, the Hang Seng in Hong Kong was down by 1.8%, while Japan's Nikkei was 0.4% lower.

"There's a lot of nervousness out there and as we approach the weekend nothing's been settled between Russia and Ukraine," Michael James, managing director of equity trading at Wedbush Securities said.

"The continued weakness, especially in the growth names, is indicative of elevated nervousness and sellers continuing to swamp buyers in just about every stock."

President Joe Biden said on Thursday that military action could begin imminently.

Russia called the claims "baseless" and accused the US of stoking tensions.

But uncertainty surrounding the situation, as Ukrainian forces and Russian-backed separatists traded fire in eastern Ukraine, added to investor worries, prompting the sell-off to accelerate in late afternoon trade.

Technology and communication firms led the declines, which touched most sectors on the S&P 500 and pushed the Dow to its steepest daily percentage fall since 30 Nov.

Oil futures fell more than 2%, and US officials held discussions with Saudi Arabia about a "collaborative approach" to managing potential market pressures stemming from a possible Russian invasion of Ukraine, the White House said.

The consumer staples sector was one of the few exempt from the declines, lifted by Walmart.

The discount giant rose 4% after it reported strong holiday sales and executives said they expected more shoppers to turn to it as concerns about the rising cost of living increase.

Meanwhile some assets considered less risky gained, with gold rising to an eight-month high.