Good morning. European leaders capitalize on Trump’s backing of a potential Russia-Ukraine peace deal. Some traders are bracing for a selloff in big tech. And Labubus cement their must-have status. Listen to the day’s top stories.

— Samantha Stewart and Rainier Harris

The prospect of a Russia-Ukraine truce is gaining credence with a package of security guarantees for Kyiv taking shape as leaders seize on Donald Trump’s backing for a plan that involves sending European troops as part of a potential peace deal. The US president urged Vladimir Putin and Volodymyr Zelenskiy to show “flexibility” as he pushes for a summit. Switzerland said it’d grant the Russian leader immunity under its proposal to host peace talks.

Reshuffling. Meta is restructuring its newly formed AI group again to accelerate the company’s pursuit of “superintelligence.” Meta Superintelligence Labs, or MSL, will now have four teams: TBD Lab, overseeing Meta’s large language models; FAIR, an internal AI research lab focused on longer-term projects; Products and Applied Research, which will turn models and research into consumer products; and MSL Infra, which will focus on infrastructure. Shares slid. 

Magnificent Seven-peer Nvidia’s day wasn’t too hot either. As Wall Street’s summer calm cracked a selloff in big tech sent major stock gauges lower, underscoring the market’s narrow reliance on a handful of growth giants. The Nasdaq 100 slid 1.4%— its second-worst drop since April’s tariff shock.

Team-up confirmed. Commerce Secretary Howard Lutnick said the US and Intel are in discussions for the government to take a stake in the chipmaker, casting the move as a bid to convert Chips and Science Act grants into equity. The plan would not give the US governance or voting rights in the company, even though it could make the federal government Intel’s largest shareholder. Shares have rallied on the deal, but the sudden rebound comes with a worrying side-effect: a valuation so high its most recent precedent is from the dot-com era more than two decades ago.

In trade news, Scott Bessent took aim at some of the “richest families in India,” saying they benefited from the purchase of Russian crude oil, while reiterating plans to boost tariffs on the country. The White House is also stepping up scrutiny of imports of steel, copper, lithium and other materials from China to enforce a US ban on goods allegedly made with forced labor in the country’s Xinjiang region.

Deep Dive: Bracing for Disaster

Traders’ nerves have hit a fever pitch. Some are worried that a myriad of factors—from the impact of artificial intelligence on software companies to Nvidia’s earnings next week— could crater big tech’s surge and spark a major selloff. 

• Scarred by the April plunge after Trump’s tariff tantrum, traders want insurance. Just in case the Magnificent 7 rally reverses, they’re buying “disaster” puts on the Invesco QQQ Trust Series 1 ETF, which tracks the Nasdaq 100 Index. 

• But there’s reason to worry less. While the stock market sank more than 20% from its Feb. 9 high to its April 8 low, the average selloff over the last 18 months has stayed around 12.5%, Jeff Jacobson, head of derivative strategy at 22V Research Group, said. 
• All eyes are on the Federal Reserve. Traders are watching for any rate cut signals from chair Jerome Powell at the Jackson Hole symposium in Wyoming at the end of the week. 

The Big Take

Opinion

Trump trade adviser Peter Navarro has reminded Narendra Modi of US privilege, Andy Mukherjee writes. If India wants to keep earning dollars by selling goods and services to America, it has to recycle them as per Washington’s diktats.