In Europe, the pan-continental STOXX 600 index fell 0.9 per cent, with falls deepening after a auto rammed a group of soldiers in Paris, injuring six, in what officials said was a suspected terrorist attack.
Treasury prices rose, driving their yields, which move in the opposite direction, lower.
Despite its recent weakening, the New Zealand dollar is still up more than 5 percent this year, setting a 26-month high of $0.7557 in July. US stocks also retreated (http://www.marketwatch.com/story/us-stock-futures-pull-back-as-north-korea-threatens-guam-2017-08-09), although Walt Disney Inc. shares (http://www.marketwatch.com/story/disney-and-netflix-what-the-split-means-for-viewers-2017-08-08)(DIS) were also a major source of pressure on the Dow Jones Industrial Average.
Shares of SeaWorld Entertainment Inc. slid 6.2 percent after the theme park operator reported second-quarter revenue that fell short of Wall Street's expectations.
Mounting tensions between the U.S. and North Korea have weighed on equity markets, sending the majority of the Asian and European bourses into red territory and inducing a spike in volatility.
Networking, semiconductor, and internet stocks are also seeing some weakness, while gold stocks are moving notably higher amid a jump by the price of the precious metal. The stock fell $166 to $1,882.94.
Korea's Kospi stock benchmark lost 1.1% as geopolitical concerns grew, while US stocks traded modestly lower (http://www.marketwatch.com/story/US-stock-futures-pull-back-on-rising-north-korea-tensions-2017-08-09).More news: Mystery as United States expels two Cuban diplomats
The Nasdaq Composite was down 16.88 points, or 0.26 percent, at 6,353.58.
The 10-year notes last fell 3/32 in price to yield 2.2655 percent, from 2.257 percent late on Monday.
Gold fell $2.10 to $1,262.60 an ounce.
"Gold can help especially if the dollar is not a safe haven anymore", Koesterich said, referring to how the dollar has weakened in response to the spate of news from Washington.
The euro was 0.4 percent weaker at 129.135 yen having reached a 1-1/2-year high above 131.00 just a week ago.
The Standard & Poor's 500 index rose 7 points, or 0.3 percent, to 2,488. September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel. Brent crude, the worldwide standard, shed 8 cents to $52.29 a barrel.
The pound bought $1.2999, up slightly from $1.2993 late Tuesday in NY.
CURRENCIES: The dollar fell to 109.96 yen from 110.48 yen late Tuesday.