Traditional safe-haven currencies including the Swiss franc and Japanese yen rose against the US dollar. "Tensions are still high and not going away at the moment".
However, investors were shifting from stocks to safe-haven options such as the yen, gold and U.S. Treasurys.
The Canadian dollar edged down 0.20 cents to 78.73 USA cents, while oil prices gained 39 cents to 49.56 US dollars a barrel and gold prices increased 19.10 to 1,281.70 USA dollars an ounce.
The U.S. Commerce Department announced a preliminary decision Tuesday evening to tax aluminum foil from China at a rate of between 16.5% and 81%, based on the subsidies it says it receives from the Chinese government. Japan is the world's biggest creditor country and there is an assumption that investors there will repatriate funds in a crisis. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones US defence index was up 1.6 per cent after hitting a record high.
"We are encouraged by our first-quarter performance, although we continue to believe that fiscal 2018 will be a transition year for our company, as we focus on laying the foundation for the future by executing on our strategic plan", he said. It was last up 0.0 percent at 1.1329 per euro EURCHF= .
The 10-year notes US10YT=RR last fell 3/32 in price to yield 2.2655 percent, from 2.257 percent late on Monday.
The Russell 2000 is up 39.82 points, or 2.9 percent.
Analysts pointed to the harsh threats and sabre rattling from US President Donald Trump, including a message Wednesday on Twitter boasting the United States' nuclear arsenal was now "more powerful than ever before".
Oil prices fell for a third day on doubts over OPEC's ability to limit supply. Brent crude, used to price worldwide oils, gained 40 cents to $52.54 in London.
Investors fled to gold on Wednesday as tensions between North Korea and United States reached a recent peak, pushing the precious metal's price to an intraday high of $1276.2/oz.
In Europe, France's CAC 40 fell 1.6 percent to 5,135 while Germany's DAX was down 1.3 percent at 12,133. US gold futures GCcv1 gained 0.09 percent to $1,265.80 an ounce.
Travel website operator Priceline fell 6.72 percent, while travel-review website operator TripAdvisor was down 7.74 percent after both the companies issued disappointing forecasts.