NEW YORK  - World stock markets dipped on Friday, with U.S. equities stalling after a soft reading on first-quarter economic growth, while the euro strengthened as euro zone inflation rose to hit the European Central Bank's target.

The U.S. economy grew at a 0.7 per cent annual rate in the first quarter, its weakest pace in three years, amid tepid consumer spending and as businesses invested less on inventories, in a potential setback to President Donald Trump's promise to boost growth.

The lackluster number sent equity indexes on Wall Street slightly lower, although strong earnings from Google parent Alphabet (GOOGL.O), which was up 4.7 per cent, and Amazon (AMZN.O), which rose 1.8 perc ent, curbed losses on the benchmark S&P index and briefly pushed the Nasdaq to a record.

"Equities are off to slow start this morning as investors are digesting a relatively weak first quarter GDP report, but on balance there remains much to like about the current environment," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

"The investment stars appear perfectly aligned - earnings are increasing, the Goldilocks-like economy remains in force and equities appear on the fringe of a technical breakout with the S&P on the doorstep of all-time highs," Sandven said.

First-quarter earnings are currently expected to grow by 13.6 per cent, according to Thomson Reuters data, the best performance since 2011.

The Dow Jones Industrial Average fell 30.62 points, or 0.15 per cent, to 20,950.71, the S&P 500  lost 3.62 points, or 0.15 per cent, to 2,385.15 and the Nasdaq Composite dropped 0.46 points, or 0.01 per cent, to 6,048.48.

The Dow was on track for its best week since early December while the Nasdaq was poised for a sixth-month winning streak, its longest since 2013.

The pan-European FTSEurofirst 300 index ost 0.21 per cent and MSCI's gauge of stocks across the globe shed 0.12 per cent.

At six straight months of gains, MSCI's index was set to notch its longest monthly winning streak since 2006.

Inflation blew past expectations to hit a three-year high, keeping pressure on the European Central Bank to start dialing back its stimulus measures.

Euro zone bond yields rose, with the yield on 10-year benchmark German government bonds hitting a session high of 0.361 percent, and the euro strengthened against the dollar, up 0.19 per cent to $1.0893.

U.S. Treasury debt yields rose across the board on Friday after the GDP data. Benchmark 10-year notes last fell 3/32 in price to yield 2.3072 per cent, from 2.296 per cent late on Thursday.

In commodities, oil prices advanced after a slide to a one-month low the previous day spurred buying ahead of an OPEC meeting next month at which producers could prolong output curbs. Both Brent and U.S. crude were on track for their second straight weekly and monthly declines.

U.S. crude rose 0.55 per cent to $49.24 per barrel and Brent  was last at US$52.15, up 0.64 per cent on the day.