But despite the largest percentage drop in over a month on a global equities index, US equities ended only slightly lower as healthy corporate earnings and a recent string of strong economic data enticed investors into beaten-down stocks.
USA indexes opened lower for the third straight day on Thursday as North Korea's threat to land a missile just short of the US territory of Guam added fuel to simmering tensions with the United States.
US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate hike.
Losses in health care and consumer-focused companies pulled USA stocks broadly lower Tuesday, snapping a 10-day winning streak for the Dow Jones industrial average. Banks and utilities had some of the biggest gains.
The Fed expects "very weak" USA inflation to rebound thanks to a slide in the dollar and to a labour market that keeps getting hotter, one of the Fed's most influential officials said in comments that reinforce its gradual policy-tightening plan.
The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.0 percent to C$93.36, and Manulife Financial Corp falling 2.8 percent to C$24.93.
The Dow Jones industrial average fell 36 points, or 0.2 percent, to 22,048.
Macy's shares closed down 10.2 percent and Kohl's fell nearly 6 percent 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.
However, U.S. stocks recovered temporarily late on Wednesday as investors appeared to brush off the geopolitical concerns following encouraging comments from Secretary of State Rex Tillerson. All the indexes are down for the week.
The 30-year Treasury bond rose 27/32 in price to yield 2.8252 percent, from 2.867 percent late on Tuesday.
"Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore.
Note: North Korea said it was examining an operational plan for firing a ballistic missile toward Guam, a U.S territory in the Pacific Ocean.More news: North Korea and the Trump Administration's Foreign Policy Dysfunction
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Most large-cap stocks were mixed across the board. That's the biggest increase since May. "This really is a profit-taking sell-off".
Avis Budget Group slumped 9.9 percent after the vehicle rental company cut its guidance following a weak second quarter.
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.
Disappointing earnings also helped pull the market lower Wednesday. The Shanghai Composite slipped 1.1 percent to 3,240.69.
First Quantum Minerals Ltd. (FM.TO) announced Wednesday its intention to suspend operations at its Ravensthorpe nickel operation, in Western Australia, and place it on care and maintenance at the beginning of September 2017 due to the persistently low nickel price. The stock lost $2.36 to $20.67.
Investors will also be keeping an eye out on retail results as second-quarter earning season winds down. Kohl's fell $2.43, or 5.8%, to $39.50. The trend appeared to overshadow strong quarterly revenue growth in the quarter. The euro slid to $1.1742 from $1.1752.
Materials, home to gold producers and other resource-based companies, was the only gainer among the index's 10 main sectors and was up 0.6 percent. Brent crude, used to price worldwide oils, gained 16 cents to $52.30 in London.
In other energy futures trading, wholesale gasoline dipped 1 cent to $1.62 a gallon. Wholesale gasoline dropped 2 cents to $1.60 a gallon, while heating oil shed 2 cents to $1.63 a gallon. Humana rose $3.41, or 1.4 percent, to $253.63.
Spot gold added 1.3 percent to $1,277.15 an ounce. Silver gained 14 cents to $16.39 an ounce.
The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday. The euro rose to $1.1774 from $1.1752.
Significant losses were also reported at Visa Inc.
In Europe, Germany's DAX fell 1.1 percent, while the CAC 40 in France lost 0.6 percent. Britain's FTSE 100 added 0.1 percent. S&P/ASX 200 and Nikkei 225 futures are well in the red ahead of the open, taking their cues from the selloff stateside.