The euro was slightly up against the U.S. dollar to last trade at 1.1754, though the single currency has plunged from the highs of 1.1909 achieved last week following reports showing a strong labor market in the US.
Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, said: "While the tough talk about the potential for war (between the United States and North Korea) is scary, investors have heard it many times before".
Most large-cap stocks were mixed across the board.
"With the North Korean authorities taking the heat off the nuclear threats, we expect the market pressure to cool off, as long as the US President also manages to read "truce" between the lines".
The S&P 500 and Nasdaq followed the Dow, falling 1.5 percent and 2.1 percent, respectively.
Atletica, niente finale dei 200 metri per Tortu
Ma Filippo non ci sta, scuote la testa: "Stadio fantastico, pubblico eccezionale e il fresco non mi dispiace". Non sarà sufficiente il 20 " 34, suo primato personale, corso lo scorso 8 giugno al Golden Gala di Roma .
Dudley also cautioned that "it's going to take some time" for inflation to rise to the central bank's 2 percent target even as he offered a generally positive outlook for the US economy, job market and price pressures.
Avis Budget Group slumped 9.9 percent after the vehicle rental company cut its guidance following a weak second quarter.
After ending the previous session modestly lower, stocks may see further downside in early trading on Wednesday. "So we're not going to get to a year-over-year number of 2-percent until some of these very low readings drop out of the statistics 6 to 10 months from now".
Nvidia fell $7.37, or 4.3 percent, to $164.74, while Advanced Micro Devices gave up 71 cents, or 5.5 percent, to $12.12. It was last up 1.1 percent at 1.1321 per euro. Bank of New York Mellon slid $2.09, or 3.9 percent, to $51.95, while Citizens Financial Group shed $1.32, or 3.8 percent, to $33.71.
Futures markets were also pointing to a lower start for Wall Street, where missile makers have been the only significant gainers in recent days.
The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a auto hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%. South Korea's Kospi fell 0.2 percent. Hong Kong's Hang Seng dipped 1.6 percent to 27,314.74. Early Friday, the ICE Dollar Index was up just 0.04% to 93.437.
Michael Kors climbed 21.5 percent after the luxury handbag and apparel designer and retailer's latest quarterly results beat analysts' forecasts as sales improved. On Tuesday, the DAX added 0.3 per cent, the CAC 40 gained 0.2 per cent and the FTSE rose 0.1 per cent.