Recently I was around a couple co-workers and made a joke. They took it as a joke, but took it as it having a sexual angle which I didn't mean at all. In fact, in my mind it was a huge stretch to take the joke sexually. The worst part is that this joke referred to my co-workers daughter, which was the topic of conversation at the time. Thankfully, he just laughed (a real laugh, not nervous laughter) and said "I didn't mean for it to go there". Then I laughed a little back and said "no you took it wrong. I didn't mean it like that". However, they both kept laughing and acting as if it was a sexual joke. I almost wish he would have gotten mad instead though so that I could have gotten serious to explain the joke.
Would it most likely be better to ignore this or confront my co-worker to explain after the fact?