The S&P/TSX Composite Index settled into the red 1.62 points to close Tuesday at 15,256.35.
The broad-based Stoxx Europe 600 stock index dropped 0.5 percent in early trading, with key indices, such as Britain's FTSE 100, Germany's DAX and France's CAC all down 0.5 percent or more.
The back-and-forth came on the heels of reports the USA intelligence community has determined North Korea has successfully produced a miniaturized nuclear warhead that can fit inside its missiles.
Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programmes as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions. The news may drive investors into the safety of U.S. Treasury Notes and Bonds, which will drive down yields. On Monday, the S&P 500 and Dow closed at record highs. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58.
CMC Markets' chief market analyst Michael Hewson says in his morning markets email on Wednesday: "US markets underwent a bit of a roller-coaster session yesterday with the Dow and S&P500 once again hitting new record highs, as the Dow looked to close at a record for the 10th day in succession before rolling over just after the London close".
In the political sphere, investors will be keeping a close eye on the rising tensions between North Korea and the US on Wednesday.
US crude oil inventories fell by 6.5 million barrels to 1.15 billion barrels while gasoline inventories rose 3.4 million barrels to 231.1 million barrels in the week ended August 4, the Energy Information Administration reported Wednesday. It fell 19 cents, or 0.4 percent, to $49.39 per barrel Monday in NY. Japan's Nikkei 225 Index tumbled by 1.3 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.
In the latest U.S. economic data, the Labour Department's Job Openings and Labor Turnover Survey, or JOLTS, showed job openings rose by 461,000 to a seasonally adjusted 6.2 million, a record high. Brent crude, used to price worldwide oils, gave up 29 cents to $51.85 in London.
German and US government bonds, alongside gold and the Japanese and Swiss currencies, were the main beneficiaries. The euro edged down to $1.1726 from $1.1751.
Eight of the 11 major S&P sectors were lower, with the consumer discretionary index's 0.59 percent fall leading the decliners.