The S&P 500 and the Nasdaq fell on Friday as social media and ad tech firms led declines after dismal quarterly revenue from Twitter and Snap, while an upbeat forecast from American Express kept the Dow afloat.

Snap's shares plunged 35%, a day after the Snapchat owner missed revenue targets and declined to make a forecast, while Twitter Inc slipped following a surprise fall in revenue.

The social media sector is expected to post the slowest ever global revenue growth in the second quarter after a blowout 2021.

Online ad giants Meta Platforms Inc and Alphabet Inc tumbled 5.5% and 2.5%, respectively, weighing on the Nasdaq index.

Meta and Alphabet are set to post their earnings next week, along with Big Tech peers including Apple Inc, Microsoft Corp and Inc.

The Dow Jones Industrial Average was lifted by American Express Co, which jumped 4% after it raised its annual revenue forecast.

Investors are focusing on the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week for clues on the health of the economy. While the U.S. central bank is expected to raise interest rates by 75 basis points to curb runaway inflation, the GDP data is likely to be negative again.

Two quarters of negative GDP would mean the United States is in a recession.

Meanwhile, a survey on Friday showed that U.S. business activity contracted for the first time in nearly two years in July, deepening concerns about an economy stunted by high inflation, rising interest rates and dwindling consumer confidence.

Red-hot inflation forced Verizon Communications Inc to cut its annual adjusted profit forecast, sending its shares down 5.5%.

Still, Wall Street's three main indexes were set to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting after markets cheered quarterly reports from Tesla Inc and Netflix Inc .

"We're looking for the relief rally to mature soon and yield at pullback and at the same time, we're looking for volatility to increase," said Katie Stockton, founder of technical analysis firm Fairlead Strategies.

"And the timing of it would be natural next week with all of the big earnings hitting the tape and the FOMC announcement."

At 9:58 a.m. ET, the Dow Jones Industrial Average was up 26.11 points, or 0.08%, at 32,063.01, while the S&P 500 was down 4.82 points, or 0.12%, at 3,994.13. The Nasdaq Composite was down 49.86 points, or 0.41%, at 12,009.75.

Of the 106 S&P 500 companies that have reported earnings so far, 75.5% topped expectations. Analysts now see year-on-year S&P 500 profits to grow 6.2% for the second quarter, down from the 6.8% estimate at the start of the three-month period, according to Refinitiv data.

Advancing issues outnumbered decliners by a 1.34-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.51-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 30 new lows, while the Nasdaq recorded 17 new highs and 21 new lows.

(Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)