04:40 PM EDT, 03/20/2026 (MT Newswires) -- US equity indexes dropped on Friday close amid reports that the US may deploy troops to pressure Iran to unblock the Strait of Hormuz, and as expectations of an interest-rate increase lifted government bond yields.

The Nasdaq Composite dropped 2% to 21,647.61, with the S&P 500 down 1.5% to 6,506.48 and the Dow Jones Industrial Average lower by 1% to 45,577.47. Most US sectors were in the red, led by utilities, real estate, and technology.

The US government is considering plans to occupy Kharg Island, which is vital to Iran's oil exports, in anticipation that the move would pressure Tehran to allow oil tankers to pass through the Strait of Hormuz, Axios reported Friday, citing people with knowledge of the matter.

"We've always had boots on the ground in conflicts under every president, including Trump. I know this is a fixation in the media, and I get the politics, but the president is going to do what's right," a White House official said, according to Axios.

Meanwhile, the US military is deploying thousands of Marines to the Middle East, officials told Reuters on Friday. President Donald Trump called NATO allies "cowards" for not helping the US secure the Strait of Hormuz, which remains effectively shut as global oil prices rise, CNN reported. US officials are trying to avert a potential months-long closure of the strait, multiple sources told CNN.

This comes as British ministers on Friday agreed to expand the US use of British bases to include "US defensive operations to degrade the missile sites and capabilities being used to attack ships in the Strait of Hormuz," CNN reported. Previously, the UK had only allowed American forces to use British bases for operations to prevent Iran from firing missiles that directly put UK lives or interests at risk.

West Texas Intermediate crude oil futures jumped 2.8% to $98.81.

Iranian officials have become reluctant even to discuss reopening the Strait of Hormuz as they focus on surviving the US-Israeli onslaught, Bloomberg reported, citing a person involved in direct, high-level contacts with Tehran.

Energy infrastructure attacks and strikes on high-profile Iranian officials, including the recent killing of security chief Ali Larijani, mark an escalation that is slowing attempts to get commercial ships moving again, the person told Bloomberg, speaking anonymously to discuss private talks.

In economic news, the Federal Reserve Bank of St. Louis is now forecasting Q1 US GDP growth of 1.69%, down from an earlier estimate of a 2.05% gain.

According to the CME FedWatch tool, the probability that the Federal Reserve will raise interest rates by 25 basis points to 3.75%-4% more than doubled by late Friday, albeit from a low base, at some point during this year. The likelihood of an increase in the fed funds rate in September, October, or December is currently above 25%, more than tripling from a day ago.

US Treasury yields jumped, with the 10-year up 9.7 basis points to 4.38% and the two-year higher by 5.9 basis points to 3.89%.

In company news, Super Micro Computer ( SMCI ) said late Thursday it placed two of its employees on administrative leave and terminated a contractor after US prosecutors indicted all three for allegedly conspiring to violate export controls. Super Micro shares sank 33%, the worst performer on the S&P 500.