A batch of disappointing company earnings also helped pull the market lower, with consumer-focused companies and technology stocks among the biggest decliners.
The Standard & Poor's 500 index fell 5.99 points, or 0.2 percent, to 2,474.92.
The Nasdaq Composite was down 37.30 points, or 0.59%, at 6,315.03.
Japan's Topix index had the biggest slide in nearly three months, while European-index futures fell as investors took advantage of the latest volley of words to take some profit after global equities climbed to record highs this week.
The Nasdaq composite lost 18.13 points, or 0.3 percent, to 6,352.33. The Russell 2000 index of smaller-company stocks gave up 13 points, or 0.9 percent, to 1,396.
OPEC pumped more oil in July as global oil supplies rose for the third straight month, the IEA said Friday, giving figures that cast further doubt on the cartel's pledge to cut output to raise prices.
The Nasdaq Composite, meanwhile, was facing its worst week since the one ended December 2, which logged a loss of just over 2%.
But U.S. stocks regained some lost ground, despite Trump's comments Friday that U.S. weapons are "locked and loaded", ready to respond if North Korea acts "unwisely".
Mounting tensions lifted USA defense stocks.
Damage for the week: The days of verbal sparring between Washington and Pyongyang looks set to bruise weekly performances for the major US indexes. He said that North Korea "can be very very nervous" if it acts on either the United States or its allies, and warned that "things will happen to them like they never thought possible".
DLF Q1 profit falls by 58% to Rs 109 crore YoY
Mercator Ltd posted a net loss of Rs 28.70 crore for the quarter ended June 30, 2017, on the back of lower income. Implementation of RERA (the real estate law) and GST has continued to elongate the sales cycle.
The VIX, a measure of Wall Street volatility, spiked more than 30% Thursday.
Avis Budget Group Inc. slumped 9.9 percent after the auto rental company cut its guidance following a weak second quarter. The stock fell 85 cents to $12.76.
Shares of Manulife, which reported better-than-expected results, fell after the company played down talk of a John Hancock spin-off.
This week, the S&P 500 started on a stronger note by rising to fresh record high price levels.
Shares of health care equipment and services company Henry Schein Inc. declined amid a broader slide by health care stocks. Viacom slid 93 cents, or 3 percent, to $29.84.
OIL: Benchmark U.S. crude added 39 cents to settle at $49.56 a barrel on the New York Mercantile Exchange.
Federal funds futures suggested the chance of rate hike in December fell to 40 percent from 42 percent shortly before the release of the data. Silver gained 14 cents to $16.39 an ounce.
Barrick Gold Corp rose 2.3 per cent to C$21.74 as the price of gold, a safe-haven asset, reached its highest levels in two months.
Markets overseas were mixed Tuesday. Economists had expected prices to rise by 0.2%.