Major U.S. indexes dipped on Friday as shares in social media and ad tech firms decline following weak earnings from Twitter and Snap, offsetting gains from card issuer American Express following an upbeat forecast.

Still, the S&P 500 and the Dow are on track to end the week with their biggest gains in nearly a month, with growth stocks doing most of the heavy lifting as markets cheer quarterly reports from Tesla Inc and Netflix Inc.

Snap Inc's shares tumbled nearly 40%, after the Snapchat owner posted its weakest-ever quarterly sales growth as a public company, while Twitter Inc slipped 0.6% following a surprise fall in revenue.

Online ad giants Meta Platforms Inc and Alphabet Inc tumbled 7.5% and 6.4%, respectively, weighing on the Nasdaq.

Meta and Alphabet are set to post their earnings next week, along with mega-cap peers, including Apple Inc, Microsoft Corp and Amazon.com Inc.

The S&P 500 communication services and information technology tumbled 4.8% and 1.9% respectively, leading declines among the index's 11 sectors.

"Earnings are coming in less bad than feared, but they're deteriorating from what we got used to and accustomed to over the last several quarters," said Bob Doll, CIO at Crossmark Global Investments.

"The other cross current along with earnings is how far is the Fed going to have to go to fight this inflation? Have we seen peak inflation? All these cross currents will continue to create volatility."

Market participants continue to await anxiously for the Federal Reserve's meeting and second-quarter U.S. gross domestic product data next week. 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.

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.

Verizon Communications Inc cut its annual adjusted profit forecast as inflation weighs, sending its shares down 8%. American Express Co rose 2% on strong earnings and an increased revenue forecast.

At 2:07PM ET, the Dow Jones Industrial Average fell 264.87 points, or 0.83%, to 31,772.03, the S&P 500 lost 55.4 points, or 1.39%, to 3,943.55 and the Nasdaq Composite dropped 276.24 points, or 2.29%, to 11,783.37.

Analysts now expect 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.

Declining issues outnumbered advancing ones on the NYSE by a 1.83-to-1 ratio; on Nasdaq, a 2.86-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 31 new lows; the Nasdaq Composite recorded 25 new highs and 58 new lows.