Yields fall when prices rise. Hours later, North Korea said it was considering launching missiles at Guam.
S&P 500 e-minis were down 9.25 points, or 0.37 percent, with 296,288 contracts traded.
The Dow Jones industrial average lost 71 points, or 0.3 percent, to 22,013.
At 12:28 p.m. ET (1628 GMT), the Dow Jones Industrial Average was down 52.87 points, or 0.24 percent, at 22,032.47, the S&P 500 was down 2.8 points, or 0.11 percent, at 2,472.12. The comments follow reports that the North has mastered a technology needed to strike the United States with a nuclear missile.
"The declines in United States markets started to gain traction in the afternoon session as nervousness set in after President Trump warned North Korea that they would face "fire and fury like the world has never seen", if they continued with their attempts to build a nuclear warhead, that is able to hit the western US".More news: Kenya opposition leader urges large turnout ahead of elections
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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.
Officials in North Korea said they were "carefully examining" a strike on Guam, which is home to around 163,000 people and two US military installations and threatened a further "all-out war wiping out all the strongholds of enemies, including the USA mainland" in a government statement. Energy stocks fell along with crude prices as investors kept an eye on the latest company earnings and geopolitical news. Both were coming off record highs. Mainland markets also traded below the flat line, with the Shanghai Composite slipping 0.18% and the Shenzhen Composite lower by 0.14%.
Nevertheless, traditional safe havens jumped, with the benchmark 10-year US note yield hitting its lowest level since June 28 and gold futures surging more than 1 percent. The Labor Department said job openings jumped about eight percent and that fewer people were quitting their jobs. The data suggest employers have plenty of jobs to fill but are struggling to find workers.
FED WATCH: As well as monitoring the geopolitical backdrop, investors are looking ahead to an appearance Thursday by Bill Dudley, president of the U.S. Federal Reserve Bank of NY, for signs of the Fed's outlook on the economy. Still, he said, "the Washington, D.C., bedlam and North Korea's saber-rattling is muddying the broader landscape". The euro edged down to $1.1726 from $1.1751. September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel.
The S&P/TSX Composite Index settled into the red 1.62 points to close Tuesday at 15,256.35. Brent crude, used to price worldwide oils, gave up 29 cents to $51.85 in London.