(Updates with closing stock moves)

* Main indexes see fourth straight weekly loss

* US deploying more troops to Middle East

* S&P 500 -1.51%, Nasdaq -2.01%, Dow -0.96%

By Noel Randewich and Johann M Cherian

March 20 (Reuters) - Wall Street ended sharply lower on

Friday, with the S&P 500 closing at its lowest in six months, as

the U.S.-Israeli war against Iran entered its fourth week,

deepening worries about inflation and the potential for higher

interest rates.

The conflict in the Middle East showed no signs of easing. The

U.S. military was deploying an amphibious assault ship with

thousands of additional Marines and sailors to the Middle East,

while Iran's new supreme leader hailed Iran's "unity" and

"resistance."

"The market is finally settling into the idea that this may

go on longer than initially expected, and I think that's why

markets are selling off. This conflict may go on not for just a

few weeks, but maybe beyond several months," said Jake

Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.

MAGNIFICENT SEVEN COMPANIES FALL

Wall Street's most valuable companies dropped, with Nvidia ( NVDA )

and Tesla losing over 3% each. Alphabet

, Meta Platforms ( META ) and Microsoft ( MSFT ) were

all down about 2%.

U.S. Treasuries fell for a third session, in step with a broader

selloff in UK and European government bonds, as the Middle East

conflict kept oil prices elevated and reinforced inflation

worries.

U.S. rate futures show the Fed is more likely to raise

interest rates than cut them by the end of 2026, according to

CME's FedWatch tool.

"We just have a classic environment that is pushing rates

up and it's driven by higher inflation expectations, which

relate back to the oil price. And the fact that we're heading

into the fourth week of the war suggests that that stress is not

going away anytime soon," said Padhraic Garvey, head of global

rates and debt strategy at ING in New York.

The S&P 500 declined 1.51% to end the session at 6,506.48

points, its lowest since September.

The Nasdaq slumped 2.01% to 21,647.61 points, leaving it

down almost 10% from its record high close on October 29.

The Dow Jones Industrial Average declined 0.96% to 45,577.47

points.

The Russell 2000 index of smaller companies dropped

2.26%, leaving it down 10% from its record high close on January

22.

Nine of the 11 S&P 500 sector indexes declined, led lower by

utilities, down 4.11%, followed by a 3.15% loss in

real estate.

The S&P 500 energy sector index was near flat for

the day, but it logged its 13th straight weekly gain. That

week-over-week rally was its longest since at least the late

1980s, according to LSEG data, as geopolitical events in

Venezuela and the Middle East dominated much of the first

quarter.

Friday marked the once-in-a-quarter simultaneous expiry of

derivatives contracts tied to stocks, index options and futures,

also known as "triple witching," and volume on U.S. exchanges

was heavy, with 27.5 billion shares traded, compared to an

average of 20.1 billion shares over the previous 20 sessions.

For the week, the S&P 500 lost 1.9%, while the Nasdaq and

Dow lost just over 2%.

Since the war in Iran began on February 28, the S&P 500 has

lost 5.4%, the Nasdaq has declined 4.5% and the Dow is down

nearly 7%. All three major indexes are below their 200-day

moving averages, underscoring the recent deterioration of

sentiment on Wall Street.

Super Micro Computer ( SMCI ) tumbled 33% after three people

associated with the artificial intelligence server maker were

charged with smuggling at least $2.5 billion of AI technology to

China. Rival Dell advanced.

FedEx ( FDX ), often seen as a barometer of business activity,

issued upbeat forecasts and said global demand was holding

steady despite geopolitical tensions, sending its shares up

almost 1%.

Declining stocks outnumbered rising ones within the S&P 500

by a 3.4-to-one ratio.

The S&P 500 posted 11 new highs and 36 new lows; the Nasdaq

recorded 43 new highs and 274 new lows.