At 11:03 a.m. ET (1503 GMT), the Dow Jones Industrial Average .DJI was down 110.36 points, or 0.5 percent, at 21,938.34, the S&P 500 .SPX was down 19.12 points, or 0.77 percent, at 2,454.90. North Korea said that it was considering Guam as a target to fire missiles.
The Standard & Poor's 500 index fell 5.99 points, or 0.2 percent, to 2,474.92.
The S&P hasn't moved more than 0.5 percent in one day since July and has fallen more than 1 percent only twice this year. The major averages have slid firmly into negative territory, with the Dow and the S&P 500 pulling back further off Monday's record closing highs.
Investors are losing enthusiasm for Canada's banking stocks as a slowdown in the country's housing market dents banks' growth prospects, with insurance companies seen as a better bet to benefit from higher interest rates.
Analysts said media and entertainment stocks also seemed to get caught up in the broader market drop, but emphasized it was often hard to isolate reasons behind specific stocks' movements.
The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon.
The CBOEVolatility Index, the most widely followed barometer of expected near-term market volatility, was up as much as 12.63 points, its highest in more than a month.
Investors, who took the North Korea report from Japan in their stride earlier in the day, lost their appetite for risk after Trump's comments to reporters during his vacation at his golf club in New Jersey. And Blue Apron shares dipped after its first earnings report as a public company.
"Although we certainly can get a 5 to 7 percent correction, we don't think it's the start of a significant bear market", Peterson noted.
Macy's shares closed down 10.2 per cent and Kohl's fell nearly 6 per cent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off. Economists had expected another 0.1 percent uptick.
Nasdaq 100 e-minis were down 1 points, or 0.02 percent, on volume of 49,062 contracts.
About 6.48 billion shares changed hands on USA exchanges on Wednesday compared with the 6.16 billion average for the last 20 sessions.
Offsetting the declines was a 0.4 percent gain by the materials group, which includes gold producers.
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