The most typical answer to “What’s up” is “Not much, how about you?” and that’s it. If the other person actually does want to have a conversation at that moment, then they’ll continue on with a question or something they want to talk about, like whose party you went to last night or what you’re doing this coming weekend.
In general, Americans seem to beso you can just start a topic and kick it over to the other person to continue the conversation.
Tons of textbooks make it sound like everyone’s going to ask you “How do you do?” and that you should reply “I am fine,” but that’s super old fashioned. I can’t even think of the last time I ever had a conversation like that.
One warning: if you just respond “Not much” without also asking “how about you?” or even simply “you?” then that is usually a sign that you’re either not interested in chatting or that it’s not a convenient time for you to talk right now.