Reports that Gary Cohn is considering resigning as Trump's top economic advisor weighed on Wall Street, although the White House has denied the claims.
The council, which had not yet been assembled, would have provided the White House with advice on how to spend billions of dollars to improve the nation's roads, bridges and railways.
The sell-off was fueled in part by uncertainty over the White House's abilities to push through tax reform and an infrastructure investment bill, policies that businesses see as good for profits and economic growth.
The announcement comes on the heels of Trump's dissolution of two major business councils, whose members began to resign en masse over the president's response to the deadly violence in Charlottesville, Va.
"Cohn is a key member of the administration who is determined to press forward with tax reform".
U.S. stocks fell sharply on Thursday as a deadly attack in Spain added to existing unease over President Donald Trump's agenda amid the latest controversy and the split with business leaders.
The White House announced President Donald Trump fired chief strategist Steve Bannon on Friday. It could face an equally strong backlash if investors come to believe that the markets have been trading on conditions that will be unrealized.
Investors were rattled over rumours regarding Economic Adviser Gary Cohn's future. Andrew Harrer
He ran Goldman Sachs and amassed an estimated net worth of $US266 million before becoming Trump's leading economic adviser.
In other remarks from prominent Fed officials, speaking on the same day, Mineapolis Fed chief Neel Kashkari said than when deciding when to start unwinding its bond portfolio, the USA central bank would take into consideration the state of negotiatios on raising the federal government's debt ceiling.
The euro edged up 0.2 percent against the dollar, after tumbling on Thursday to a three-week low of $1.1662 after minutes of the European Central Bank's July 20 policy meeting showed the bank was anxious about the currency rising too much.
Madrid shares fell more than 1 percent. Gold and tin were among the best-performing metals, and zinc traded near a 10-year high. It was last down 0.25 percent at 109.31 yen.
Seven of the 20 most active stocks ended in the green, led by Crown Equities Inc. which surged 17 percent to P0.255 and PXP Energy Corp. which jumped 8.3 percent to P3.90.
The euro was up 0.1 per cent to US$1.1737. The benchmark Shanghai Composite Index finished marginally higher at 3,268.72, although Hong Kong's Hang Seng Index slumped 296.65 points or 1.1 percent to 27,047.57. Meanwhile, after jumping $9.50 to $1,292.40 an ounce in the previous session, gold futures are climbing $9.10 to $1,301.50 an ounce. The Canadian dollar rose to a two-week high against its US counterpart on Friday, as data showing an uptick in the Bank of Canada's core measures of inflation supported the view that the central bank will raise interest rates in the fall.
On a light day on the economic front, European Central Bank data showed that the euro area current account surplus declined to the lowest in almost three years in June.
Uber Backs Down In Philippines Regulator Row
On Monday, LTFRB ordered Uber to cease operating its platform for a month following the agency's discovery that it was still accepting new vehicles into its fleet.
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