Edit in JSFiddle

function horaAtual() {

    setTimeout(function(){

    let hora = new Date().toLocaleTimeString();
    document.getElementById("rel").innerHTML = hora;

  }, 1000)
}
<!DOCTYPE html>
<html>
  <head>
    <title>Parcel Sandbox</title>
    <meta charset="UTF-8" />
  </head>

  <body>
    <p>Clique no botão abaixo para ver a hora atual.</p>
    <button onclick="horaAtual()">Iniciar Relógio</button>
    <h2 id="rel"></h2>

    <script src="src/index.js"></script>
  </body>
</html>