How Washington Just Turned Up the Heat on Putin

Summary

WSJ What’s News – "How Washington Just Turned Up the Heat on Putin"

Date: October 23, 2025
Host: Caitlin McCabe | The Wall Street Journal

---

Overview

This episode dives into a significant escalation by the U.S. government against Russia: a new wave of sanctions targeting Russian oil giants and a critical policy change lifting restrictions on Ukraine's use of long-range missiles. It also touches on related international responses, domestic U.S. developments, and market-moving business news. Analysts and WSJ reporters join to unpack the geopolitical and economic ramifications, notably for global energy, the war in Ukraine, and companies like Tesla.

---

Key Discussion Points

1. U.S. Sanctions Russia’s Oil Giants

• Announcement Details ([00:18]–[01:53])
  • For the first time in President Trump's second term, the U.S. imposes sweeping sanctions on Russia’s two largest oil firms, Rosneft and Lukoil.
  • The goal: targeting Russia’s energy sector, a major source of funding for its military campaign in Ukraine.
• Journal Editor Lawrence Norman Unpacks the Move ([01:53]–[02:26])
  • "This is really a milestone moment on the Trump administration's approach to the war."
    – Lawrence Norman, [01:53]
  • Uncertainty over impact: The effectiveness depends on U.S. enforcement and international compliance (especially from China and India).
  • The U.S. has "sweeping enforcement powers," possibly compelling foreign actors to comply.

2. Coordination with Europe

• Tandem Efforts and Their Weight ([03:12]–[04:05])
  • The European Union passes its 19th sanctions package against Russia, including a phase-out of Russian LNG imports.
  • Norman emphasizes renewed U.S.-EU unity: “The Europeans and the US are now working together again on sanctions as they did during the Biden administration. That united front... can make the measures... more effective.” [03:15]
  • Open question: How long this alignment will last under Trump’s leadership.

3. U.S. Lifts Restrictions on Ukraine’s Use of Long-Range Missiles

• Policy Shift and Its Implications ([04:05]–[05:01])
  • The U.S. will now allow Ukraine to use some Western-supplied long-range missiles to strike inside Russia.
  • President Trump maintains ambiguity, saying, "the U.S. has nothing to do with those missiles, wherever they may come from or what Ukraine does with them.” [04:05]
  • Norman interprets the move as part of a “joined up vision” to end the war without forcing Ukraine to cede territory, pressuring Russia at a new critical point.

4. Additional Headlines

• Quantum Computing Investments ([05:08])
  • The Commerce Department is negotiating with U.S. quantum computing firms like IonQ and Rigetti to take equity stakes in exchange for federal funding, signaling heightened government involvement in critical technologies.
• White House Construction ([05:30])
  • President Trump plans to demolish the East Wing to build a 90,000-square-foot ballroom, increasing the projected cost to $300 million. A White House official notes, “The scope of the project was always subject to change.”
• New York City Mayor Debate ([06:39])
  • Heated exchanges between Andrew Cuomo and Zoran Mamdani, including personal attacks and critiques of governance and funding for city services.
    • Cuomo: “You have never had a job. You've never accomplished anything…” [06:39]
    • Mamdani: “Who was leading the state?” (Critiquing Cuomo for underfunding NYC) [06:56]

---

Market and Business Briefs

1. Tesla’s Tumultuous Earnings Call

• Financial Results and Investor Reaction ([08:03]–[11:05])
  • Tesla reports record vehicle deliveries and a 12% rise in revenue to $28 billion, but net income plunges 37%.
  • CEO Elon Musk uses the earnings call to focus on his proposed new pay package—potentially worth up to $1 trillion—stirring controversy on governance and investor influence.
    • Musk: “If I go ahead and build this enormous robot army, can I just be ousted at some point in the future?” [00:37]
    • Musk criticizes proxy advisors Glass Lewis and ISS as “corporate terrorists.” [08:45]
  • Analyst Stephen Wilmot explains that while cash flow was strong due to a “pull forward effect” (pre-September EV tax credit expiration), Q4 is expected to be much tougher.
    • Wilmot: “Obviously it was a one off because you’re running down your inventories... winter is going to be very tough.” [10:03]

2. Risks in Leveraged ETFs

• Explainer by Jack Pitcher ([11:38]–[13:08])
  • Leveraged single-stock ETFs amplify gains and losses: a 10% loss in underlying Tesla stock could lead to a 20% decline in the ETF in a single day.
  • Pitcher warns, “Over the long term, the leveraged fund tends to lose money in many cases no matter what. Even if the underlying asset goes up.” [12:26]
  • Analyst consensus: Many call these “wealth destroyers”—despite continued retail investor interest, especially amid social media hype.

---

Notable Quotes & Moments

• "This is really a milestone moment on the Trump administration's approach to the war."
  – Lawrence Norman, [01:53]
• "The Europeans and the US are now working together again on sanctions... That united front can make the measures... more effective."
  – Lawrence Norman, [03:15]
• "The U.S. has nothing to do with those missiles, wherever they may come from or what Ukraine does with them."
  – President Trump via Caitlin McCabe, [04:05]
• "If I go ahead and build this enormous robot army, can I just be ousted at some point in the future?"
  – Elon Musk, [00:37]
• "Over the long term, the leveraged fund tends to lose money in many cases no matter what. Even if the underlying asset goes up."
  – Jack Pitcher, [12:26]

---

Timestamps for Important Segments

• Sanctions on Russian oil and their impact – [01:53]
• EU response and coordination – [03:12]
• U.S. policy shift on Ukraine’s missile use – [04:05]
• Tesla earnings and pay controversy – [08:03]
• Risks of leveraged ETFs – [11:38]

---

Tone & Style

The episode maintains a brisk, news-driven tone—informative, factual, and with moments of sharp, direct reporting (especially during the New York mayoral debate and Musk’s earnings call performance). Analysts provide measured, sometimes wry commentary on the seriousness of policy and market shifts.

---

Summary

This episode highlights how recent U.S. sanctions and military policy shifts intensify pressure on Russia, potentially changing the calculus of the Ukraine conflict, while renewed U.S.-EU unity may increase their effectiveness. It captures the uncertain results these moves might yield—and broadens out to show how Washington’s interventionist streak is reshaping not just geopolitics, but key industries and even the White House itself. On the business front, sharp pivots from Tesla and a warning about risky ETF strategies illustrate today’s market volatility and the personalities driving it.

Transcript

[IBM Sales Representative]

So your AI agents make your team more productive.

[Lawrence Norman]

Right.

[IBM Sales Representative]

But if they're not connected to the rest of your business, how productive can they really make your teams? IBM helps smarter businesses get more from their AI agents. Let's create smarter business IBM.

[Caitlin McCabe]

The White House ramps up pressure on the Kremlin as it imposes new sanctions on Russian oil giants and lifts restrictions on Ukraine's use of some long range missiles. Plus, Tesla's stock drops as Elon Musk derails the earnings call for a chat about his pay package.

[Elon Musk]

Like my fundamental concern with regard to how much voting control I have in Tesla is if I go ahead and build this enormous robot army, can I just be ousted at some point in the future?

[Caitlin McCabe]

And President Trump tears down the entire east wing of the White house. It's Thursday, October 23rd. I'm Caitlin McCabe for the Wall Street Journal and here is the AM edition of what's news, the top headline, headlines and business stories moving your world today. Oil prices have surged after President Trump announced substantial sanctions on two Russian oil giants in what are the first direct US Measures on Russia during Trump's second term. At the same time, we're exclusively reporting that the Trump administration has lifted a key restriction on Ukraine's use of some long range missiles provided by Western allies, enabling attacks inside Russia. The moves come as the US Aims to pressure Russia into a ceasefire in Ukraine following stalled negotiations and a canceled summit between Presidents Trump and Putin. Journal editor Lawrence Norman has been poring over the sanctions announcement. Lawrence, give us the details.

[Lawrence Norman]

So the Trump administration, for the first time since it took office in January, announced sanctions against Russia. They've targeted the two biggest Russian oil firms, Rosneft and Lukoil, with a pretty broad transactions ban aiming to hit the energy sector, which produces a massive chunk of Russia's budget which it uses to pay for the war. So this is really a milestone moment on the Trump administration's approach to the war.

[Caitlin McCabe]

You said it's a milestone moment. Can you give us a bit more context of how big a deal this is? European allies have been wanting these extra sanctions for some time, right?

[Lawrence Norman]

Yeah. They wanted the US to go back into pressuring Russia in order to get an end to the war. Now, how hard will the U.S. sanctions hit the Russian economy is unclear. A lot of that is going to be down to how determined Washington is to enforce these sanctions. It has sweeping enforcement powers and it's the only country in the west really, that is able to force foreign countries like China, like India, to comply with sanctions. It imposes so it's going to be a massive enforcement question here and how.

[Caitlin McCabe]

Does this work in conjunction with the eu?

[Lawrence Norman]

Yeah, I think this is a really critical point. The EU approved this morning a big package, the 19th package of sanctions on Russia. It has, it has some pretty weighty measures, including a phase out of European buying of Russian LNG product which has been going up and up since the war began. So that's again, we're talking about a multi billion dollar hit to the Russian economy and there are various other measures. The crucial point is that the Europeans and the US are now working together again on sanctions as they did during the Biden administration. That united front on sanctions can make the measures that are taken either by the US or by the UK or by the EU much more effective. So it's really that they are aligned right now in sanctions. Obviously, the big question with the Trump administration is how long will that remain?

[Caitlin McCabe]

So, Lawrence, at the same time we're reporting that the US is allowing for Ukraine to use some long range missiles for attacks inside Russia. We should note that Trump has said, quote, the U.S. has nothing to do with those missiles, wherever they may come from or what Ukraine does with them. Combined with the sanctions. What does this tell us about the US approach to end the war in Ukraine?

[Lawrence Norman]

The important point here is we seem to have again a joined up vision of how the war should end in terms of Ukraine should not be pressured into unilaterally giving territory to Russia in order to end the war. Now the US and the Europeans are both saying let's end this war on the current contact line. And that could be, if it remains, that could be an important pressure point on Russia and its ability to continue the war.

[Caitlin McCabe]

Lawrence. Norman, thank you.

[Lawrence Norman]

Thank you very much.

[Caitlin McCabe]

We're exclusively reporting that the Commerce Department is in talks with several quantum computing companies about taking equity stakes in the firms in exchange for federal funding. Companies including IonQ, Rigetti Computing and D Wave Quantum are discussing minimum awards of $10 million each from a pot earmarked promising technology companies. It's the latest signal that the Trump administration is expanding its interventions in what it sees as critical segments of the economy. Staying in Washington, where President Trump now says the entire east Wing of the White House will be demolished to build his 90,000 square foot ballroom. The President also said the cost of the ballroom would be $300 million, an increase from the previous estimate from the White House of 250 million. Back in July, Trump said work on ballroom wouldn't touch the more than 100-year-old area of the White House, which traditionally hosts the offices of the first lady. A White House official said the scope of the project was always subject to change, adding that the East Wing will be modernized and rebuilt. And in New York, the three main candidates for mayor have squared off in their final debate before the November 4 election. The freewheeling debate covered public safety, the rise of antisemitism in the city and affordable housing. Former Governor Andrew Cuomo focused his attacks on the racist frontrunner, the Democratic socialist Assemblyman Zoran Mamdani.

[Andrew Cuomo]

I did things you have never had a job. You've never accomplished anything. There's no reason to believe you have any merit or qualification for 8 and a half million lives.

[Caitlin McCabe]

Mamdani hit back at Cuomo for his record as governor.

[Zoran Mamdani]

We just had a former governor say in his own words that the city has been getting screwed by the state. Who was leading the state?

[Andrew Cuomo]

It was you, Governor Holcomb, Governor Hochul, you cut funding for the fta.

[Caitlin McCabe]

Curtis Lewa, the Republican nominee who trails the two, compared his opponent's feuding to quote two kids in a schoolyard. Coming up, Tesla reports strong car sales, but you wouldn't know it judging by the stock's reaction plus a look at the exchange traded funds that analysts are calling wealth destroyers. Those stories after the break.

[TrueStage Financial Representative]

Trustage helps make annuities simple. Our flexible products and personalized support help you build stronger relationships and grow your business with confidence. Discover [e-mail] grow. TrueStage is the marketing name for Trustage Financial Group Inc. At subsidiaries and affiliates. Corporate headquarters is located in Madison, Wisconsin.

[Caitlin McCabe]

Tesla shares are falling in pre market trading this morning after the EV maker reported a 37% plunge in net income in the third quarter despite record sales. But little was actually said on the company's earnings call about its electric vehicles, with CEO Elon Musk instead using the time to discuss his new pay package which could be worth as much as $1 trillion. Musk has said the package is important in securing his of Tesla as it expands into AI and robotics projects. Journal Autos reporter Stephen Wilmot tuned into the call and joins me now. Stephen, tell us more about what Elon Musk had to say.

[Stephen Wilmot]

Well, yes, the pay package subject was what one analyst described as a heavy handed pitch. At the very end of the call they have a general meeting coming up to ratify this and the company is obviously a little nervous that it won't get the votes. It could be worth up to a trillion dollars extraordinarily if the company hits some extremely Aggressive growth milestones. So it's very much a performance related package, which is in its defense. But Elon Musk called Glass, Lewis and iss, the corporate governance ratings companies, corporate terrorists a couple of times on the call because they don't like the package. And he's concerned that passive funds essentially which automatically vote according to the recommendations of the corporate governance experts, will scupper the vote. So the, that was one aspect of the call. The other aspect really was the focus on AI above all else. Even though AI contributes extremely little if anything to Tesla's current results.

[Caitlin McCabe]

There was some good news in the earnings, right? Revenue rose 12% to $28 billion for the quarter, driven by strong sales of electric vehicles. Do analysts expect that trend to last?

[Stephen Wilmot]

Yeah, the short answer is no. It was a good quarter for revenues in particular and cash flow also. Cash flow is at a record and that's because the company delivered a record number of vehicles, almost 500,000 in the quarter and it produced about 50,000 less than that, just under 450,000. So if you deliver a lot more vehicles than you produce, then you get a huge cash benefit. So they had record cash flows, which is plus. But obviously it was a one off because you're running down your inventories. And the other factor is that there was this Federal Tax Credit, $7,500 tax credits on EV purchases which expired on September 30th. So there was a rush to take advantage of this in the third quarter. But of course the flip side of that pull forward effect is that it will go into reverse in the fourth quarter as everyone who had been intending to buy an EV would have already bought one. So Elon Musk said three months ago in the second quarter call that the Q4 Q1 might be tough. It's widely acknowledged, including by the company itself, that winter is going to be very tough.

[Caitlin McCabe]

That's Journal autos reporter Stephen Wilmot. Thanks for joining us.

[Stephen Wilmot]

Thank you.

[Caitlin McCabe]

And Tesla shares being down this morning is particularly bad news for investors in popular leveraged funds that are tracking the stock. Because while these risky exchange traded funds offer to double or even triple the value of the underlying asset, they've also exposed more investors to steep losses. Journal finance reporter Jack Pitcher explains how these single stock funds work.

[Jack Pitcher]

If you bought the two times long Tesla ETF and Tesla rose 5% tomorrow, your ETF would be up 10%. That also applies to the downside. If Tesla falls 10%, your ETF is going to be down 20% on a daily basis. One issue with these funds and the fund managers readily tell people this is that they're only made to track the performance of their underlying asset over a single day. What that means is if you hold onto them for a longer period of time, the volatility of the underlying asset going up and down can make the return of the ETF differ quite a bit from the underlying asset. Over the long term, the leveraged fund tends to lose money in many cases no matter what. Even if the underlying asset goes up.

[Caitlin McCabe]

The associated risk means some large managers, such as BlackRock and JP Morgan Asset Management have avoided these ETFs, with Jack adding that some analysts even call them funds wealth destroyers.

[Jack Pitcher]

One reason we've seen these still be popular is they had a really good period late last year. It was going around social media a lot that people were making really big gains betting on Tesla levered funds or MicroStrategy levered funds, which is a Bitcoin linked stock. So a lot of money went into these funds late last year and they have not performed as well since then. Both of those funds I mentioned, Tesla and MicroStrategy, are trailing their underlying stock over the last 12 months, even though the underlying stock is up.

[Caitlin McCabe]

Of the just over 700 leveraged equity ETFs available, Bank of America analysts say roughly 200 have been launched in 2025 alone. And that's it for what's news for this Thursday morning. Today's show is produced by Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Caitlin McCabe for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

[University of Michigan Researcher]

Not all breakthroughs make noise. Some are made of sound. It's called Histoptripsy, developed at the University of Michigan that's now an FDA approved non invasive cancer treatment for liver tumors. No scalpels, no radiation, just sound breaking down barriers to life saving care for the public good. Look to Michigan, see more solutions at umich. Edu. Look.