All three major stock indexes dropped 0.2 per cent at the close, with the Dow Jones Industrial Average finishing at 22,085.34, halting a almost two-week run of closing records.
Dow e-minis were down 35 points, or 0.16 percent, with 37,467 contracts changing hands at 8:40 a.m. ET (1240 GMT).
Gold enjoyed an impressive single-day jump - its biggest in almost three months - as the rising tensions between the USA and North Korea lifted safe-haven demand. The Dow and the S&P 500 are pulling back further off the record closing highs set on Monday. U.S. Secretary of State Rex Tillerson said he did not believe there was an imminent threat.
"Trump's comments about North Korea have created nervousness and the fear is if the President really means what he said: "fire and fury", said Naeem Aslam, chief market analyst at Think Markets in London.
The Nasdaq Composite was down 16.88 points, or 0.26 percent, at 6,353.58.
North Korea releases imprisoned sick Canadian pastor
The 62-year-old was in poor health and wrote letters to his friends stating he had stomach pain and high blood pressure. A family spokesperson says his health was deteriorating, and he lost an excessive amount of weight while in detention.
"As a result all major U.S. markets closed lower for the first time in over two weeks, and this weakness unsurprisingly has spilled over into Asia markets as well, as geopolitical tensions prompt some nervousness, particularly since North Korea's state media suggested that they examining the prospect of a missile strike near the USA base in Guam". Economists had expected productivity to increase by 0.7 percent. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58.
WALL STREET: Losses in health care and consumer-focused companies pulled US stocks lower, snapping a 10-day winning streak for the Dow Jones industrial average. Micron Technology added 58 cents, or 2 percent, to $29.17, while Western Digital gained$1.33, or 1.6 percent, to $82.30.
All 11 major S&P sectors were lower and the consumer discretionary index .SPLRCD was the biggest loser with a 1 percent drop. Japan's Nikkei 225 slipped 0.3%.
Politics lifted US defense stocks. Yields fall when prices rise. September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.8 basis points at 2.225 percent. Elsewhere, the German Dax has opened down 0.80%, France's CAC40 index is down 0.87%, and the Euro Stoxx 50 is down 0.81%.
Upmarket clothing brands Ralph Lauren and Michael Kors were early winners on the USA stock market on Tuesday, surprising investors with their quarterly performance despite a tough climate for retailers.