People work on the floor of the New York Stock Exchange (NYSE) on Wednesday in New York City. AFP
Shortly after opening, the Dow Jones Industrial Average lost 1.0 percent at 52,412.15, and the broad-based S&P 500 slid 0.5 percent to 7,465.38.
The tech-heavy Nasdaq Composite Index pulled back 0.3 percent to 25,731.69.
Trump's comments on the war have "triggered a sell-off" in markets, said Sam Stovall from CFRA.
While the US leader said that officials can still negotiate, opening the door to a potential resolution, worries over surging oil prices are front-of-mind for investors.
Traders will also be monitoring for stronger than expected US inflation numbers next week.
On Wednesday, international benchmark Brent North Sea crude and the main US contract, the West Texas Intermediate, both rallied at least five percent.
When asked if the Iran truce was intact despite an exchange of strikes, Trump said at a NATO summit Wednesday: "As far as I'm concerned, it's over."
"I'll let our wonderful negotiators keep talking if they want, but I don't see it," he added.
Investors are also watching for the release of the Federal Reserve's latest meeting minutes on Wednesday, following the US central bank's first policy gathering with new chairman Kevin Warsh at the helm.
Traders will be monitoring for details on the Fed's thinking when it comes to interest rates.
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