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.
Andersen Air Force Base on Guam is where the United States keeps its B1-B bombers deployed to the Asia Pacific.
In individual stock news, G4S has lost 6.20 percent to 310.10p despite reporting a rise in profits for the six months to June 30.
The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up 1.17 points at 12.12 points, its highest level in a month. The Nasdaq Composite Index declined 0.2% to 6370.46 and the Standard & Poor's 500 Index slid 0.2% to 2474.92.
Energy stocks also fell along with the price of crude oil.
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.
Public Storage (PSA) Is At $200.68 Formed Wedge; Trustmark Has 1.01 Sentiment
The firm owned 2,472 shares of the real estate investment trust's stock after buying an additional 1,033 shares during the period. Finally, Guardian Life Insurance Co. of America boosted its stake in shares of Public Storage by 0.9% in the first quarter.
"Equity markets have also come under pressure, with the geopolitics bringing the run into record highs on Wall Street to an end", Richard Perry, market analyst at Hantec Markets, said in a note, as quoted by MarketWatch. Both the Japanese Yen and Swiss Franc have outperformed on renewed safe haven demand.
The Sensex recovered partially before settling down 216.35 points, or 0.68 per cent, at 31,797.84 - its lowest closing since July 18.
WALL STREET: Losses in health care and consumer-focused companies pulled USA stocks lower, snapping a 10-day winning streak for the Dow Jones industrial average.
Toyota Motor Corp dropped 2.0 percent, Honda Motor Co shed 1.4 percent, TDK Corp stumbled 3.1 percent and Advantest Corp slipped 3.8 percent. Travel-review website operator TripAdvisor was down 7.35 percent.
US crude shed 18 cents to $48.99 a barrel, while Brent crude fell 25 cents a barrel at $51.89 a barrel.
"Tensions will continue to mount and could eventually develop into a "black swan" event that the markets are not prudently considering", Steve Hanke, professor of Applied Economics at the Johns Hopkins University, told the Reuters Global Markets Forum on Wednesday. September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel.