At the close, the Dow Jones Industrial Average had fallen 0.6 percent while the broad S&P 500 index and the tech-heavy Nasdaq Composite index closed unchanged.
This came after President Donald Trump made threatening remarks about the ceasefire with Iran, rejected Tehran's proposal to reopen the Strait of Hormuz, and said that the US blockade of Iranian ports will continue.
The central bank's controversial decision to leave the key interest rate unchanged did not lighten the mood either.
In addition, oil prices continued to rise, further fueling fears of rising inflation. A barrel of North Sea oil climbed 7.8 percent on Wednesday and now costs $120.
