At the close, the Dow Jones Industrial Average had lost 1.9 percent, the broad S&P 500 index had lost 1.6 percent, and the technology-heavy Nasdaq Composite had fallen 2 percent.
At a press conference at the White House on Wednesday, Donald Trump intensified his threat against Iran and announced that the United States "will attack" the country.
The price of oil rose after Trump's speech; at 10 p.m., a barrel of North Sea oil cost just over $93.
Investors are also likely weighing in on recent inflation statistics showing that U.S. inflation rose to 4.2 percent in May, which was in line with analysts' expectations.
The figure, which shows the increase in consumer prices compared with a year ago, compares with 3.8 percent in April.
